Paramount Global Hits Bumps In Q3 As Pay-TV Declines

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Paramount Global shares slid in pre-market trading after the media company reported third-quarter financial results below Wall Street’s expectations.

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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 49% to 39 cents. Analysts had called for revenue of slightly more than $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.

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 pay-TV to direct-to-consumer outlets.

Paramount Pictures release horror hit Smile in the quarter, its sixth No. 1 movie at the box office this year, helping boost revenue 48% to $783 million. 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 expansion 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.”