Paramount Misses Revenue Expectations but Surprises with Profit, Driven by Strong Streaming Performance

By Maggie Last updated Mar 2, 2024

Paramount Global surprised investors in the fourth quarter by posting a quarterly profit despite missing revenue expectations. The company’s streaming platform, Paramount+, showcased robust performance, contributing to the positive outcome. Here’s a breakdown of Paramount’s fourth-quarter performance compared to Wall Street estimates:

Earnings per share: 4 cents, surpassing the expected loss of 1 cent.
Revenue: $7.64 billion, slightly below the expected $7.85 billion.

During the last quarter of 2023, Paramount reported a profit of $514 million, or 77 cents per share, a significant 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.

Despite a 6% year-over-year decline in revenue, Paramount made significant progress in its streaming segment, which includes brands like CBS, Showtime, BET, Nickelodeon, and its movie studio. Paramount+ reached 67.5 million subscribers during the period, marking a net increase of 4.1 million, and recorded a remarkable 69% revenue growth year over year. The company aims to make Paramount+ profitable by 2025.

Subscription revenue in the fourth quarter grew by 43%, partly driven by price adjustments, while revenue across its entire direct-to-consumer segment increased by 34%. Paramount also observed a 27% surge in global viewing hours across Paramount+ and Pluto TV during the fourth quarter.

CEO Bob Bakish emphasized the company’s commitment to maximizing returns on content investments, scaling streaming, and optimizing the cost base of the business. He expressed satisfaction with the early momentum across all platforms in 2024, highlighting the effectiveness of the company’s strategy and assets.

Facing challenges in a rapidly evolving media landscape, Paramount has been exploring sale options for some or all of its business. Talks with Warner Bros. Discovery regarding a potential acquisition have been paused. Earlier this month, Paramount announced approximately 800 layoffs, following record viewership numbers for the Super Bowl.

In the latest earnings report, the company disclosed a 12% year-over-year decline in TV media revenue, with advertising revenue decreasing by 15% due to softness in the global advertising market and a 5-percentage point impact from reduced political advertising. Additionally, revenue in Paramount’s filmed entertainment sector dropped by 31% year over year, primarily due to lower licensing revenue.