ViacomCBS VIAC reported fourth-quarter 2019 adjusted earnings of 97 cents per share that missed the Zacks Consensus Estimate by 30.7% and declined 42% year over year.
Revenues of $6.87 billion also lagged the Zacks Consensus Estimate of $7.35 billion. The figure declined 3% year over year.
Adjusted OIBDA decreased 32% from the year-ago quarter to $1.16 billion.
Selling, general and administrative (SG&A) expenses increased 15.2% year over year to $1.49 billion.
Shares of ViacomCBS are down 8.6% in pre-market trading following the dismal fourth-quarter result.
Revenues by Type
Advertising revenues of $3.03 billion declined 2% year over year. While Domestic revenues declined 1%, International revenues fell 10%.
However, Affiliate revenues of $2.13 billion climbed 1% year over year. Domestic revenues grew 2%, while International revenues declined 8%.
Content Licensing revenues of $1.28 billion declined 11% year over year.
Publishing revenues fell 1% year over year to $215 million.
Theatrical revenues of $129 million decreased 13% year over year.
Other revenues fell 3% year over year to $83 million.
TV Entertainment revenues declined 1% year over year to $3.13 billion due to lower political advertising sales and content licensing.
TV Entertainment adjusted OIBDA decreased 13% from the year-ago quarter to $625 million.
Cable Networks revenues fell 2% year over year to $3.09 billion. Linear subscriber declines more than offset growth from OTT services.
Cable Networks adjusted OIBDA decreased 32% from the year-ago quarter to $792 million. The results reflect increased investment in programming and OTT services.
Filmed Entertainment revenues declined 14% year over year to $532 million. Adjusted OIBDA loss was $119 million, wider than the year-ago quarter’s loss of $77 million.
As of Dec 31, 2019, cash and cash equivalents were $632 million compared with $956 million as of Sep 30.
Net-term debt, as of Dec 31, was $18.09 billion compared with $17.21 billion, as of Sep 30.
Free cash outflow was $561 million in the fourth quarter against free cash flow of $391 million in the previous quarter.
For 2020, ViacomCBS expects revenues to grow in mid-single digit.
Domestic Streaming & Digital Video revenues are projected to grow in the 35-40% range. Domestic streaming subscribers are expected to be roughly 16 million. Moreover, domestic Pluto TV MAUs are anticipated to be roughly 30 million.
Adjusted OIBDA is expected between $5.8 billion and $6.1 billion for 2020. Cost synergies are expected to be roughly $250 million.
Adjusted earnings are expected between $5.15 and $5.50 per share.
Moreover, adjusted free cash flow is expected to be $1.8-$2 billion.
Zacks Rank & Stocks to Consider
ViacomCBS currently carries a Zacks Rank #3 (Hold).
TEGNA TGNA, Gray Television GTN and Netflix NFLX are some better-ranked stocks in the broader Consumer Discretionary sector. While TEGNA sports a Zacks Rank #1 (Strong Buy), Gray Television and Netflix have a Zacks Rank #2 (Buy), at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Long-term earnings growth rate for both TEGNA and Gray Television is pegged at 10%, while Netflix is expected to grow at 30%.
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