ViacomCBS Gets Past Wall Street Q3 Estimates, But COVID-Hit Revenue Slips 9%

ViacomCBS reported total revenue of $6.12 billion and earnings per share of 91 cents in the third quarter, exceeding Wall Street estimates but reflecting ongoing headwinds from COVID-19.

Revenue dipped 9% and earnings fell 17%, though both figures exceeded analysts’ consensus forecast for earnings of 88 cents a share and revenue just shy of $6 billion in the quarter ending September 30.

Advertising revenue pulled back 6% in the quarter, totaling $2.2 billion, compared with $2.3 billion in the same quarter in 2019.

In the TV Entertainment unit, affiliate revenue rose 25% on reverse compensation and retransmission gains, while advertising dipped 1% and content licensing fell 35%. The licensing dropoff was attributed in the earnings release to “the timing of program availabilities and the adverse impacts of COVID-19.”

The coronavirus pandemic likewise took the blame for cable advertising declining 11% in the period.

Paramount Pictures revenue plunged 31% to $590 million and operating income fell 18%. Paramount has opted to sell off certain film titles rather than push them to future release dates as it copes, along with other studios, with months-long theater closures in New York and LA due to COVID-19. Eddie Murphy sequel Coming to America 2 recently was sold to Amazon Studios, in a deal Deadline reported to be in the $125 million range.

The company, which completed its long-awaited merger last December, has increasingly emphasized streaming. It is on track to launch the rebranded Paramount+ service (which will succeed CBS All Access) in the first quarter of 2021.

Domestic streaming and digital video revenue rose 56% to $636 million, with subscription streaming revenue jumping 78% and Pluto TV’s advertising revenue more than doubling.

CBS All Access and Showtime’s streaming outlet combined to reach 17.9 million in the quarter. Results for both have historically been reported jointly. The company has set a goal of both services totaling 25 million subscribers by 2022.

Pluto TV is now at 28.4 monthly active users, up 57% from the same point in 2019. Internationally, Pluto reported an additional 7.5 million users.

Book publishing, interestingly, proved a bright spot in the quarter. ViacomCBS had been looking to sell Simon & Schuster along with other assets, saying in March that it had received 25 inbound offers for the publisher. Plans for a transaction have been on hold during COVID-19.

Revenue at Simon & Schuster climbed 29% over the 2019 quarter, on strong sales of titles like Mary Trump’s Too Much and Never Enough: How My Family Created the World’s Most Dangerous Man and Bob Woodward’s Rage.

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