The Paramount logo is displayed at Columbia Square along Sunset Blvd in Hollywood, California on March 9, 2023.
Patrick T. Fallon | AFP | Getty Images
Paramount Global’s stock rose in extended trading Thursday after reporting strong revenue and subscription trends in its third-quarter earnings report.
The out-of-hours move adds to an already busy day for the media giant. The stock closed up more than 10% during Thursday’s regular trading session.
Paramount – home to brands including CBS, Showtime, BET, Nickelodeon and its eponymous film studio – saw a 38% year-over-year increase in revenue. In the third quarter, streaming service Paramount+ saw 2.7 million net adds to its total subscriber base of 63 million. The company also narrowed its losses in its streaming segment to $238 million, from $343 million a year ago.
Here’s Paramount’s third-quarter performance compared to Wall Street estimates:
- Earnings per share: 30 cents versus 10 cents per share expected, according to LSEG, formerly known as Refinitiv
- Income: $7.13 billion versus $7.099 billion expected, according to LSEG
For the period ending Sept. 30, Paramount reported profit of $295 million, or 43 cents per share, compared with $231 million, or 33 cents per share, a year earlier. Adjusted for non-recurring items, earnings per share amounted to 30 cents over the period.
“We continue to execute on our strategy and prioritize prudent investments in streaming while maximizing profits from our traditional business,” CEO Bob Bakish said in the release. “Looking ahead, we remain on track to achieve significant growth in total company earnings in 2024.”
Paramount and other media stocks closed higher Thursday as streaming device maker Roku jumped 30% following its own stellar earnings report.
The company said theatrical revenues increased 63% year over year, citing films such as “Mission: Impossible – Dead Reckoning Part One” and “Teenage Mutant Ninja Turtles: Mutant Mayhem.” .
Paramount also expects streaming losses for all of 2023 to be lower than last year. The segment’s overall revenue jumped 38% to $1.69 billion from the previous year.
The television advertising market, however, posed a challenge for the company, with advertising revenue down 14% year-on-year. The company cited “continued weakness in the global advertising market and declines in political advertising.”
“While we remain focused on executing on our strategy to create world-class content with mass popular appeal, delivered across all platforms and monetizing it through multiple revenue streams, there is no “There has never been a more important time for us to remain nimble and adaptive as the industry continues to evolve,” Bakish said during the company’s earnings conference call.
Licensing and other revenues also fell 7%, with the company citing the effects of strikes.
Although the company suffered additional expenses during the SAG-AFTRA and WGA strikes, company executives said during the earnings conference call that they were confident in the strength of Paramount’s content.
While Netflix instituted a crackdown on password sharing – and Disney the first plan – limiting access to accounts, CFO Naveen Chopra said Paramount+ has no current plans to follow in those footsteps.
“At this time, we do not view this as a major impediment to our growth efforts,” Chopra said during the earnings conference call. “This is obviously something that we will continue to monitor, and the good news is that I think there is a model for how we could approach this problem in a useful and creative way. But right now, we we have very powerful growth engines.”
Leaders dodged questions about potential merger and acquisition activity, in the meantime. The earnings report came days after Paramount reached a deal with sells book publisher Simon & Schuster to private equity firm KKR for $1.62 billion.
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