Paramount Global Hits Bumps In Q3, With Pay-TV Declines Offsetting Streaming Progress; Stock Drops In Pre-Market Trading
Paramount Global shares slid in pre-market trading after the media company reported third-quarter financial results below Wall Street’s expectations.
While streaming service Paramount+ reached 46 million subscribers, up 4.6 million from the previous quarter, the broader picture was less upbeat. Total revenue inched up 5% to $6.9 billion, while earnings per share tumbled 70% to 21 cents. Analysts had projected revenue of $7 billion and earnings per share of 43 cents.
Paramount stock fell as much as 10% in pre-market trading, slipping below $18. Like most media and tech stocks, it has had a challenging 2022, falling nearly in half over the course of the year.
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The company’s TV Media division had a difficult quarter, with total revenue down 5%. Advertising pulled back 3%, with higher political spending and pricing not managing to offset the impact from lower
impressions and foreign currency impacts.
Affiliate and subscription revenue declined 5% year-over-year, with the company citing ongoing declines in pay-TV subscribers. The company also said it restructured certain international affiliate agreements, resulting in a shift of revenue from our pay television services to our DTC services.
Paramount Pictures release horror hit Smile in the quarter, helping boost revenue 48% to $783 million, with the direct-to-consumer business also robust, with a 38% gain in revenue to $1.2 billion.
While Paramount+ is the centerpiece of the company’s streaming effort, total direct-to-consumer subscriptions hit 67 million in the period. Paramount’s joint venture with Comcast, SkyShowtime, debuted during the quarter and replaced Paramount+ in the Nordics. In the current quarter, Paramount+ will launch in France, Germany, Austria and Switzerland. CEO Bob Bakish pointed to the rollout in the official earnings release. The company has a “differentiated strategy,” he said, “anchored by our broad range of popular content, our diverse portfolio of platforms, and our truly global operating reach.”
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