Wall Street isn’t buying ViacomCBS’s plans to compete with Netflix.
Investors sent shares of the newly combined owner of Showtime and Nickelodeon lower on Thursday on a disappointing earnings report that included more details on its streaming plans.
Shares plummeted over 17 percent Thursday as the company said it has swung to a fourth-quarter loss since merging Viacom and CBS late last year.
ViacomCBS chief executive officer Bob Bakish used the earnings report to outline the company’s turnaround plan, which includes launching a new streaming service to compete with Netflix, Disney and Amazon.
Bakish asked investors to look beyond the “headwind” of hefty costs associated with the merger and laid out a plan for 2020 to expand its streaming reach and find new ways to drum up licensing and advertising revenue for its content.
The CEO said the new “House of Brands” streaming service would expand on CBS All Access to include shows from Viacom networks, Nickelodeon, BET, MTV and Comedy Central. The company will rebrand Showtime’s sister network, Showtime Showcase, as an African American-focused service called “SHO*BET.”
In its first earnings report since the merger closed, ViacomCBS posted a fourth-quarter net loss of $273 million or 44 cents a share, compared with a year-ago profit of $884 million, or $1.43 a share. Adjusted earnings totaled 97 cents a share.
Revenue slid 3 percent to $6.87 billion, weighed down by an 11 percent dip in content-licensing revenue. Results included a $589 million write-down for programming and $468 million in restructuring charges. ViacomCBS missed Wall Street expectations of earning per share of $1.44 on revenue of $7.36 billion.
Bakish upped his target for post-merger cost savings to $750 million from $500 million, as ViacomCBS plows forward with new rounds of layoffs.
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