New York City media conglomerate ViacomCBS beat Wall Street estimates for first-quarter revenue and profit earlier this month. Now chairwoman Shari Redstone says “significant growth” lies ahead, despite strong competition and an ongoing coronavirus pandemic that has increased media consumption but decreased ad revenue across the media industry.
“These are extraordinary times,” Redstone said Monday during the ViacomCBS annual shareholder meeting that was, naturally, webcast. But the company has “significant growth opportunities we are moving quickly to capture,” she added. Redstone said the company’s “content has never been in greater demand among audiences around the world” and touted the recent combination of the once-discrete CBS and Viacom brand portfolios as a “global multi-platform content powerhouse.”
CEO Bob Bakish, also present on the shareholders call—the first since Viacom and CBS merged in December—said Pluto TV, the company’s free, advertising-supported streaming service, is functioning as a “massive free front door” for customers to find and pay for subscriptions to the CBS All Access and Showtime streaming platforms. “Our growing scale, audience reach, and earnings power will become even more evident as the market rebounds,” Bakish said, echoing similar comments he made before the merger at Fortune’s Brainstorm Tech conference in 2018.
During the company’s first-quarter earnings call earlier this month, ViacomCBS reported more than 13.5 million domestic streaming subscribers, a 50% increase year over year. It was enough to offset a 19% decline in advertising revenue to $2.48 billion, exacerbated by the cancellation of the NCAA March Madness basketball tournament.
On Monday, Bakish said ViacomCBS is now “seeing some green shoots in advertising—but we continue to need to manage through it.”
Because of these strides, as well as the streaming gains thanks to what Redstone described on Monday as “unmatched content assets,” the chairwoman argued that ViacomCBS’s stock has upside.
“We totally believe the stock is dramatically undervalued,” said Redstone, who also serves as president of theater and mass media holding company National Amusements, which holds about four-fifths of ViacomCBS’s voting stock. “The market is looking for us to prove that we can execute on our strategy. I’m confident we will do so more quickly than anyone expects.”
Shares of ViacomCBS increased about 10% by midday, trading to around $19. Shares are down roughly 64% for the year to date.
More must-read stories from Fortune:
—Drive-in theaters are back. These are the movies you can see, and where you can see them
—What to expect on network TV during the 2020–21 season
—3 reasons why Quibi is “losing the attention game”
—Another Star Trek series is coming to CBS All Access
—Snowpiercer showrunner, production designer: We didn’t want a “carbon copy” of the movie
