ViacomCBS went into red during last quarter of 2019 but management’s upbeat on merger’s cost savings
The newly formed ViacomCBS reported its fourth quarter results β and investors weren’t happy.
The company, which was officially formed in December 2019, saw both revenue and profits dip in the final months of the year.
Viacom and CBS first agreed to a merger in August of 2019.
In fact, profits were down so far the company went into the red.
CEO Bob Bakish called the quarter “transitional” and said the company lost a net $273 million on continuing operations.
By comparison the fourth quarter of 2018 saw the separate companies make a combined $884 million in profit.
That news sent the stock down 15% in the day after its analyst call.
The company attempted to allay Wall Street by emphasizing it is moving quickly on “integration” that could result in cost savings of up to $750 million β $250 million more than the company announced previously.
Savings in marketing and distribution job cuts are likely to be a driving force behind those savings, reports Deadline.
TV advertising revenue was down 5% to $1.7 billion in the fourth quarter of 2019. The same time period also saw licensing revenue fall 9% to $715 million. However, affiliate fees rose 27% to $682 million.
Meanwhile, the combined company has announced plans to combine its streaming operations into a single platform to better compete against Disney+ and the upcoming HBO Max and Peacock offerings.
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