Paramount revenue misses as cable, studio declines dull streaming gains
11:25 am Friday, November 08th, 2024
(Reuters) -Paramount Global missed quarterly revenue estimates on Friday as weakness in the media giant’s studio and cable businesses outweighed strong subscriber growth at its streaming service after the return of NFL.
Its shares dropped 3.7% in early trading even as third-quarter profit surpassed Wall Street expectations thanks to cost controls and the streaming subscriber gains.
A content line-up that included the National Football League (NFL), the second season of crime drama series “Tulsa King” and horror film “A Quiet Place: Day One” helped the Paramount+ streaming service add 3.5 million subscribers in the third quarter.
That was better than Visible Alpha estimates for 2.46 million additions, and marked a sharp turnaround from the 2.8 million subscribers the service lost in the previous quarter.
Revenue at Paramount’s TV media business, which includes CBS and MTV, fell 6% due to lower spending from advertisers and a drop in subscribers.
Customers have been shunning cable TV for streaming platforms, eroding a lucrative profit engine for media companies and pressuring them to seek options for their legacy businesses.
Paramount’s total third-quarter revenue of $6.73 billion missed expectations of $6.95 billion, according to data compiled by LSEG. Its filmed entertainment business revenue dropped 34%.
The studio unit had just one major theatrical release this quarter – the animated film “Transformers One” – which raked in revenue of $127 million from the global box office.
STREAMING SHINES
Paramount’s streaming business posted an adjusted operating income of $49 million for the quarter, while analysts expected a loss of $160.1 million.”We feel good about our position and our ability to remain a standalone” streaming service, said Co-CEO Chris McCarthy in a post-earnings call. “You can count on us to be opportunistic, looking at partnerships.”
It was the second straight quarterly profit for the streaming unit as the business also benefited from a price hike for Paramount+ in August and a 6% decline in costs.
The company has been cutting costs ahead of its planned merger with Skydance Media. The deal is expected to close in the first half of 2025, Paramount said.
Total costs fell nearly 2% in the September quarter, helping Paramount report an adjusted profit of 49 cents per share, compared with estimates for 24 cents.
(Reporting by Harshita Mary Varghese in Bengaluru and Dawn Chmielewski in Los Angeles; Editing by Devika Syamnath)
