Viacom (NASDAQ:VIAC) is poised to report its fourth-quarter and full-year financial results at the back of an impressive start to the New Year. The stock is up by more than 80%, two months into the New Year and showing no signs of slowing down.
Viacom Long Term Prospects
The impressive run comes despite the legacy TV provider coming under pressure from cord-cutting in recent years. Renewed and strengthened investor confidence comes at the backdrop of the company confirming plans to strengthen its business empire in the burgeoning streaming arena.
Viacom has already announced plans to unveil a new streaming service. Paramount + is the name of the new service that will expand the company’s TV legacy business in the burgeoning streaming space. The new streaming service is poised to boost Viacom's valuation, which explains why the stock has been on an impressive run in recent weeks.
In addition to pursuing opportunities for growth around content streaming, Viacom's move to strengthen its regular cable business has also gone well with investors. The company has already renewed its contract with 13 local TV affiliates. With the contract signing, the company is poised for a revenue boost given the fees that come into play.
Viacom Earnings Expectations
Ahead of the Q4 earnings Wall Street expect the company to deliver impressive quarterly results; Earnings are expected at 78 cents a share, implying a 1% year over year increase. In addition, analysts expect the TV legacy company to deliver a 1.2% revenue increase at $6.9 billion.
Solid fourth-quarter financial results should reflect an improving ad-spending environment. With the opening of the global economy in the aftermath of the COVID-19 pandemic, advertisers are increasingly turning to platforms with a huge user base as part of their advertising campaign. Likewise, Viacom is believed to be one of the biggest beneficiaries. However, Viacom revenues are believed to have taken a significant hit on the reduction of capacity in theaters. Likewise, delays in new movies until theaters fully open could negatively impact content licensing revenues in the fourth quarter.