ViacomCBS (VIAC) to Report Q1 Earnings: What's in the Cards?
ViacomCBS VIAC is slated to report first-quarter 2021 results on May 6.
Markedly, the Zacks Consensus Estimate for first-quarter earnings has moved up 3.4% to $1.20 per share over the past 30 days, implying growth of 6.1% from the figure reported in the year-ago quarter.
Moreover, the consensus mark for revenues is pegged at $7.46 billion, suggesting growth of 11.8% from the figure reported in the year-ago quarter.
Notably, in the trailing four quarters, the company’s earnings beat the Zacks Consensus Estimate, the average surprise being 16.86%.
Let’s see how things shaped up prior to this announcement.
ViacomCBS Inc. Price and EPS Surprise
ViacomCBS Inc. price-eps-surprise | ViacomCBS Inc. Quote
Factors to Consider
ViacomCBS’ first-quarter results are expected to reflect improvement in the ad-spending environment, driven by return of live sports globally. Notably, advertising revenues accounted for 45.7% of the company’s top line in the fourth quarter of 2020.
However, theatrical revenues of ViacomCBS are expected to have taken a hit in the reported quarter due to the closure or reduction in capacity of movie theaters in response to coronavirus.
Delay in new movies until theaters reopen and production delays in television and film programming are expected to negatively impact content-licensing revenues in the to-be-reported quarter.
Nevertheless, expanding content catalogue of live sporting events is likely to have aided user growth and ad revenues. On Mar 18, ViacomCBS announced a new multi-platform agreement with National Football League (NFL) that extends CBS’ relationship with the league for the next 11 years through the 2033 season.
Moreover, CBS Sports announced an agreement with Lega Serie A for the exclusive U.S. rights of the Serie A Championship, the Coppa Italia and the Supercoppa Italiana.
Additionally, a solid portfolio of streaming services (both advertising and subscription-based offerings) including CBS All Access, Showtime OTT, Pluto TV, Noggin and BET+ is expected to have bumped up viewership boosted by social-distancing guidelines.
On Mar 4, ViacomCBS announced the launch of Paramount+ streaming service in the United States at a premium plan of $9.99 per month while an ad-supported base plan for $4.99 per month will be available in June. This is expected to have boosted active user growth in the to-be-reported quarter.
Paramount+ features a content catalog of more than 30,000 episodes, 2,500 movie titles and over 1,000 live sporting events.
Moreover, Pluto TV has gained immense popularity with more than 250 live linear channels and thousands of hours of on-demand content. Pluto TV partners with more than 175 content providers including media houses, film and TV studios that actually help it to produce a variety of content.
Pluto TV’s domestic monthly active users were 30.1 million, up 34% year over year in the fourth quarter. The platform’s total global MAUs reached 43 million. Pluto TV’s momentum is expected to have continued in the to-be-reported quarter.
Key Q1 Developments
On Feb 26, ViacomCBS announced that it would redeem all its outstanding 2.250% senior notes due Feb 4, 2022, 3.375% senior notes due Mar 1, 2022, 3.125% senior notes due Jun 15, 2022, 2.500% senior notes due Feb 15, 2023, 3.250% senior notes due Mar 15, 2023, 2.900% senior notes due Jun 1, 2023 and 4.250% senior notes due Sep 1, 2023. The redemption date for the 2.250% senior notes, the 3.375% senior notes, the 2.500% senior notes and the 2.900% senior notes is Mar 15, 2021. The redemption date for the 3.125% senior notes, the 3.250% senior notes and the 4.250% senior notes was Mar 29, 2021.
On Mar 24, ViacomCBS announced the pricing of concurrent offerings of 20,000,000 shares of its Class B common stock (par value $0.001 per share) at a price of $85 per share. The company has priced 10,000,000 shares of its 5.75% Series A mandatory convertible preferred stock (par value $0.001 per share) at a price and liquidation preference of $100 per share.
What Our Model Suggests
Per the Zacks model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here.
ViacomCBS has an Earnings ESP of +3.86% and a Zacks Rank #4 (Sell). You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks That Warrant a Look
Here are a few companies, which, per our model, have the right combination of elements to post an earnings beat in their upcoming release.
Fox Corporation FOXA has an Earnings ESP of +13.40% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Playtika Holding Corp. PLTK has an Earnings ESP of +18.87% and is Zacks #2 Ranked.
CDW Corporation CDW has an Earnings ESP of +0.51% and a Zacks Rank #2.
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