ViacomCBS topped Wall Street analysts’ expectations for its fourth-quarter results, reporting diluted earnings per share of $1.04 and total revenue of just shy of $6.9 billion.
The consensus forecast by analysts was for earnings of $1.01 and revenue of $6.9 billion, up 13% and 3%, respectively, from the same quarter in 2019. Because the merger of Viacom and CBS was completed in December 2019, the financials reflect pro-forma and adjusted results.
The financial results were released just before the start of a multi-hour presentation to investors and press showcasing rebranded streaming service Paramount+, which launched in 2015 as CBS All Access. Paramount+ will go live next Thursday in the U.S. and Latin America. The Nordics and Australia are on deck later this year.
Like its media peers, ViacomCBS has faced a serious challenge during Covid-19, which has buffeted sports, advertising and other businesses. Advertising revenue rose 4% in the quarter, to $3.145 billion, while affiliate revenue perked up 13% to $2.4 billion. The company said affiliate sales benefited from strong growth in streaming subscription revenue, higher reverse compensation and retransmission fees, as well as expanded distribution.
Streaming has not yet matched the scale of traditional revenue streams, but it is on a steep growth curve. Global streaming and digital video revenue increased 71% year-over-year, the company said, to $888 million. Propelling the increase was a 74% rise in streaming subscription revenue and a 69% upswing in streaming advertising revenue.
Theatrical film revenue shriveled 97% to just $4 million as theaters remained closed in much of the world during the period. Paramount has elected to sell off notable releases like Coming 2 America to third-party streaming platforms. Next month, it will make the newest SpongeBob SquarePants outing available on Paramount+ at the same time as premium video-on-demand. Bigger releases like new installments of Top Gun and Mission Impossible are being delayed so as to take advantage of theaters, which can contribute $1 billion or more to global hits.
The company said Pluto now has 30.1 million domestic monthly active users (compared with 12 million when it was acquired by Viacom two years ago) and 43 million globally. Domestic streaming subscribers spanning CBS All Access and Showtime rose 71% from the same quarter in 2019 to 19.2 million. On a global basis, subscription streaming has passed 30 million subscribers.
Like other traditional media companies dependent on carriage fees and linear advertising, ViacomCBS has faced pressure from ongoing cord-cutting and the migration of ad spending to digital platforms. Those forces prompted Viacom, before it merged with CBS in late 2019, to acquire ad-supported streaming service Pluto TV for $340 million.
Investors, who initially greeted ViacomCBS with indifference after its long-awaited merger, have recently warmed to its focus on streaming. The company’s shares gained 2% today to close at $65.63, near an all-time high.