ViacomCBS absorbed a blow to its advertising business from COVID-19 in the second quarter, but managed to beat Wall Street analysts’ forecasts for adjusted earnings and clear the bar for total revenue.
Earnings of 77 cents a share came up short of the consensus expectation of analysts for 93 cents, but on an adjusted basis they came in at $1.25. Revenue of $6.275 billion slid 12% from the same quarter a year ago but exceeded the $6.17 billion consensus.
Advertising dropped 27% in the quarter, in line with other media companies hit by a widespread advertiser pullback during the pandemic. The lack of sports programming also hit CBS, which broadcasts the NCAA men’s basketball championship, the Masters and other spring events.
Theatrical revenue at Paramount Pictures was deemed “immaterial” due to continuing theater closures, with a reported $3 million compared with $152 million in the year-ago quarter.
The company said it has already reached its full-year goal of 16 million domestic streaming subscribers (primarily to CBS All Access and Showtime) and has upped the 2020 target to 18 million. Pluto TV is now at 26.5 monthly active users.
Total streaming and digital video revenue climbed to $489 million, up 25% over a year ago, paced by 52% growth in streaming subscription revenue.
On the finance front, ViacomCBS raised $4.5 billion in capital during the quarter, but said its $3.5 billion revolving credit facility remains undrawn. Leverage was about 3.3 times operating income, a better ratio than others in the tempest-tossed media sector.