ViacomCBS reported lower second-quarter profits as the COVID-19 pandemic reduced ad revenue.
Net earnings fell to $481 million, or 78 cents a share, from $977 million, or $1.57 a share, a year ago.
Revenue fell 12% to $6.275 billion.
Advertising revenue fell 27% because of the economic effects of COVID-19 and the cancellation of the NCAA Men’s Basketball Tournament and several golf events. Domestic ad revenue was down 24% to $1.73 billion.
Affiliate revenue rose 2% to $2.194 million. Domestic affiliate revenue was up 2% to $2.034 billion.
Domestic streaming and digital video revenue was up 25% to $489 million, with 52% growth in streaming subscription revenue and increases at Pluto TV, where domestic monthly active users were up 61% to 26.5 million. Pluto TV expects to have 30 million monthly active users by year end. The company said it had 16.2 million domestic streaming subscribers to its pay services and forecast that it would have 18 million by the end of the year.
The company is gearing up to transform CBS All Access into a “Super Service,” with entertainment, news and sports content.
ViacomCBS’s TV Entertainment unit reported a 36% drop in adjusted operating income before depreciation and amortization. Revenue was down 22% to $2.287 billion, with ad revenue down 22% to $2.287 billion and affiliate revenue up 22% to $751 million.
Adjusted OIBDA was up 30% to $1.285 billion at the company’s cable networks, with revenue up 2% to $3.232 billion. Ad revenue was down 26% to $3.232 billion and affiliate revenue down 6% to $1.443 billion. Content licensing rose 175% to $797 million as the company sold South Park to AT&T’s HBO Max.
Filmed entertainment OIBDA was up 22% to $116 million despite a 26% drop in revenue to $647 million.
The company said it expects to have $300 million in cost synergies resulting from the combination of Viacom and CBS, up from $250 million forecast earlier. Over three years, the cost savings should reach a run rate of $800 million, up from $750 million.
Despite the impact of COVID-19 on revenue in the quarter, we’re successfully managing through the effects of the pandemic, reaffirming the strength of our combined operations,” said CEO Bob Bakish. “Our results underscored our strong progress delivering on our value-creation initiatives, including integration cost synergies, expanded and new distribution agreements, as well as the rapid acceleration of our streaming business, where we achieved record users and revenue in free and pay while building toward the relaunch of our diversified super service.”