(Source – CNBC)
Paramount Global, in its fourth-quarter earnings report on Wednesday, defied Wall Street’s revenue expectations but pleasantly surprised investors with a quarterly profit, buoyed by robust performance from its streaming platform Paramount+.
The financial results for the last quarter of 2023, compared to Wall Street estimates from LSEG, formerly Refinitiv, revealed the following:
Earnings per share: 4 cents, surpassing the anticipated loss of 1 cent
Revenue: $7.64 billion, slightly below the expected $7.85 billion
During the final quarter of 2023, Paramount recorded a profit of $514 million, or 77 cents per share, a substantial increase from $21 million, or 1 cent per share, in the previous year. Adjusted for one-time items, earnings per share stood at 4 cents for the period.
Paramount+ Growth Highlights Quarterly Performance
Paramount, housing renowned brands such as CBS, Showtime, BET, Nickelodeon, and its eponymous movie studio, reported a 6% year-over-year revenue dip but exhibited significant progress in its streaming segment.
Paramount+, the company’s flagship streaming service, witnessed a surge to 67.5 million subscribers during the period, marking a net increase of 4.1 million, accompanied by a remarkable 69% revenue growth year over year. Paramount expressed confidence in achieving profitability for Paramount+ by 2025.
Subscription revenue experienced a substantial 43% growth in the fourth quarter, partly propelled by price adjustments, while revenue across its entire direct-to-consumer segment grew by 34%.
Paramount observed a notable 27% increase in global viewing hours across Paramount+ and Pluto TV during the quarter.
CEO Bob Bakish, in a press release, reiterated the company’s commitment to maximizing returns on content investments, scaling streaming services, and restructuring the cost base of the business. He expressed satisfaction with the early momentum witnessed across all platforms in 2024, highlighting the effectiveness of their strategy and assets.
CEO Bob Bakish Charts Course Amid M&A Speculation
Amidst the evolving media landscape, Paramount Global has explored options for selling all or parts of its business. Paramount’s shares have suffered, plummeting over 50% in the past two years due to the absence of a robust growth narrative.
Although preliminary talks with Warner Bros. Discovery for acquisition have ceased, Paramount’s strategic realignment continues. Earlier this month, the company announced approximately 800 layoffs, following the revelation of record viewership numbers for the Super Bowl.
On the revenue front, Paramount reported a 12% decline in TV media revenue year over year, attributed to a 15% drop in advertising revenue, influenced by softness in the global advertising market and a 5-percentage point impact from reduced political advertising.
Revenue from Paramount’s filmed entertainment sector plummeted by 31% year over year, driven by diminished licensing revenue.
The earnings call with Wall Street analysts saw inquiries regarding potential mergers and acquisitions, to which CEO Bob Bakish responded with a focus on creating shareholder value. Paramount Global remains resolute in its pursuit of profitability and ensuring the company’s standalone viability amidst industry shifts.
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