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ViacomCBS Gets off to a Rocky Start With Investors

ViacomCBS, in its first fiscal quarter since completing its merger, missed practically every financial target in Q4 and got whacked by investors who seemed deeply displeased with the combined company’s poor performance, sending its stock down 20% in less than two days.

Shares in ViacomCBS fell 17% ($6.38 each) on Feb. 20 to $29.29, the day it reported Q4 results. Feb. 21 wasn’t much better — the stock was down another 3% (81 cents) to $28.48 in early trading.

While the companies have only been officially together since Dec. 4, overall results were not encouraging. Consolidated revenue fell 3% to $6.9 billion, and adjusted OIBDA was down 32% to $1.2 billion.

Advertising revenue also was down 2% in the period, including a 1% decline domestically as international ad sales dropped 10%.

The idea behind the merger was to capitalize on the strengths of both companies — Viacom’s stable of youth-oriented cable networks and CBS’s broadcast properties. But neither seemed to be firing on all cylinders in Q4, with perhaps the biggest disappointment being an 8% decline in cable-network affiliate fee revenue. That was one area the company had said was stabilizing.

“[B]ased on management commentary over the course of this year, recent renewals and the flavor of upcoming negotiations, this justification for the deal appears misplaced,” Barclays media analyst Kannan Venkateshwar wrote in a note to clients.