ViacomCBS (NASDAQ:VIAC) is coping relatively well with the economic fallout from the coronavirus pandemic, as indicated in the media company's second-quarter 2020 earnings released on Thursday.
Both revenue and non-GAAP (adjusted) net profit fell compared to Q2 2019. The former dipped by 12% to land at just under $6.28 billion, while the latter fell more steeply (by 16%) to hit $769 million, or $1.25 per share.
Still, the two headline numbers easily beat average analyst estimates. For revenue, the expectation was for $6.19 billion, while per-share adjusted net profit was modeled at $0.91.
A 27% drop in TV advertising revenue was the main reason for the company's top line and net profit declines. The cancellation of college basketball's NCAA Tournament, ordinarily a significant advertising money-spinner for the broadcaster, played a major role in that drop. Since many advertisers faced a sudden threat to their business when the novel coronavirus hit the U.S., they pulled back on spending.
However, this negative development was mitigated by notable improvements in domestic streaming and digital video. Anchored by its CBS All Access service, ViacomCBS' take from the segment grew by 25% in Q2 to $489 million.
The future looks encouraging in this sphere. The company said it plans to roll out a premium streaming subscription service in foreign markets starting early next year. This will feature fresh content from the company's core CBS terrestrial network and its veteran cable channel Showtime.
Investors liked what they heard from the media incumbent on Thursday. The stock's 3.4% gain eclipsed many fellow consumer goods titles, plus the main equity indexes on the day.