ViacomCBS on Thursday said its earnings fell short of revenue and profit expectations in its first quarterly earnings results since closing its merger, sending shares down 7% in premarket trading.
Viacom and CBS completed their merger in December in their third attempt since 2016, aiming to gird against competition in a rapidly consolidating media universe while partnering with and battling the likes of Netflix and Walt Disney.
The merger reunited media mogul Sumner Redstone's entertainment empire and brought Showtime networks and CBS News under the same roof as Nickelodeon, Comedy Central and Paramount movie studios.
ViacomCBS also revealed plans to create a new streaming video service built off of its existing CBS All Access service that will offer free, paid and a premium tier subscription service.
Ahead of the launch, the company said domestic streaming and digital video business was already generating about $1.6 billion in annual revenue.
Revenue fell to $6.87 billion from $7.09 billion a year ago in the fourth quarter ended Dec. 31, missing analyst expectations of $7.36 billion, according to IBES data from Refinitiv.
Excluding items, ViacomCBS's earnings per share of 97 cents also missed expectations of $1.44, according to IBES.
Advertising revenue fell 2% to $3.03 billion during the quarter as domestic ad revenue was hit by a decline in political ads.
The company said it expects revenue to grow in mid-single digits during 2020.
ViacomCBS also said it plans to save $750 million annually, up from the previous target of $500 million from the merger.