Paramount Global’s stock moved higher in extended trading Thursday after it reported strong revenue and subscription trends in its third-quarter earnings report.
The after-hours move came on top of an already-strong day for the media giant. The stock closed more than 10% higher during the regular trading session Thursday.
Paramount — home to brands such as CBS, Showtime, BET, Nickelodeon and its namesake movie studio — reported a 38% increase in revenue year over year. In the third quarter, streaming service Paramount+ saw 2.7 million net additions to its 63 million total subscriber count. The company also narrowed losses in its streaming segment to $238 million from $343 million a year ago.
Here’s how Paramount performed in the third quarter compared to Wall Street estimates:
- Earnings per share: 30 cents vs. 10 cents per share expected, according to LSEG, formerly known as Refinitiv
- Revenue: $7.13 billion vs. $7.099 billion expected, according to LSEG
For the period ending Sept. 30, Paramount reported a profit of $295 million, or 43 cents a share, up from $231 million, or 33 cents a share, a year earlier. Adjusted for one-time items, earnings per share were 30 cents during the period.
“We continue to execute our strategy and prioritize prudent investment in streaming while maximizing the earnings of our traditional business,” CEO Bob Bakish said in the release. “Looking ahead, we remain on the path to achieving significant total company earnings growth in 2024.”
Paramount and other media stocks closed higher Thursday as streaming device maker Roku surged 30% following its own stellar earnings report.
The company said theatrical revenue increased 63% year over year, citing movies such as “Mission: Impossible – Dead Reckoning Part One” and “Teenage Mutant Ninja Turtles: Mutant Mayhem.”
Paramount also expects full-year streaming losses in 2023 to be lower than last year. Overall revenue in the segment jumped 38% to $1.69 billion from a year earlier.
The TV ad market, however, posed a challenge for the company, with advertising revenue dipping 14% year over year. The company cited “continued softness in the global advertising market and lower political advertising.”
“While we remain focused on executing our strategy to make world-class content with mass popular appeal, delivered across platforms and monetize it across multiple revenue streams, there’s never been a more important time for us to remain agile and adaptive as the industry continues to evolve,” Bakish said on the company’s earnings call.
Licensing and other revenue also decreased 7%, with the company citing effects from labor strikes.
Though the company took a hit in incremental expenses during the SAG-AFTRA and WGA strikes, company executives said on the earnings call that they’re confident in the power of Paramount’s content.
While Netflix has instituted a password-sharing crackdown — and Disney plans one — to limit account access, Chief Financial Officer Naveen Chopra said Paramount+ is not currently considering following in those footsteps.
“Right now, we don’t see that as a major headwind to our growth efforts,” Chopra said on the earnings call. “It’s obviously something that we will continue to monitor, and the good news is, I think there’s a template for how we could address that in a valuable and creative way. But right now, we’ve got really powerful growth drivers.”
Executives dodged questions on potential merger and acquisition activity, meanwhile. The earnings report came days after Paramount closed a deal to sell book publisher Simon & Schuster to private equity firm KKR for $1.62 billion.
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