Paramount Global (PARA) Q3 Earnings Fall Y/Y, Revenues Miss
Paramount Global PARA delivered adjusted earnings per share of 30 cents in third-quarter 2023, which declined 23.1% year over year. The Zacks Consensus Estimate for earnings was pegged at 8 cents per share.
Revenues of $7.13 billion missed the Zacks Consensus Estimate by 0.06%. The figure increased 3% year over year, owing to a rise in Direct-to-Consumer and Filmed Entertainment revenues, partially offset by a decline in TV Media revenues.
Adjusted OIBDA decreased 9% from the year-ago quarter’s level to $716 million.
Selling, general and administrative expenses increased 4% year over year to $1.73 billion.
Paramount Global Price, Consensus and EPS Surprise
Paramount Global price-consensus-eps-surprise-chart | Paramount Global Quote
Revenues by Type
Affiliate revenues (45.7% of total revenues) of $3.26 billion increased 13.9% year over year. Theatrical revenues (5.3% of total revenues) totaled $377 million in the reported quarter, which increased 63.2% year over year.
Advertising revenues (29.9% of total revenues) of $2.13 billion decreased 8.7% year over year. Content-licensing revenues (19.1% of total revenues) of $1.36 billion decreased 8.4% year over year.
Segment Details
Direct-to-Consumer (DTC) Details
DTC revenues increased 38% year over year to $1.69 billion, driven by subscriber growth and improvements in engagement and monetization. DTC subscription revenues soared 43% year over year to $1.3 billion, driven by pricing increases for Paramount+ and revenues from pay-per-view events.
Paramount+ revenues grew 61%, driven by subscriber growth and increased advertising revenues. Paramount+ subscribers reached approximately 63 million, with 2.7 million additions in the quarter. The company witnessed 46% growth in total viewing hours across Paramount+ and Pluto.
DTC advertising revenues increased 18% year over year to $430 million, driven by higher impressions for Paramount+ and Pluto TV.
The company reported an adjusted OIBDA loss of $238 million, which improved from a loss of $343 million in the year-ago quarter as higher revenues more than offset incremental costs to support the growth of Paramount+.
TV Media Details
TV Media revenues decreased 8% year over year to $4.56 billion, which reflected a decline in advertising revenues.
Advertising revenues decreased 14% year over year to $1.7 billion, reflecting continued softness in the global advertising market and lower political advertising.
Affiliate and subscription revenues of $2 billion remained flat year over year. Licensing and other revenues decreased 12% year over year to $860 million, primarily due to lower revenues from original content produced for third parties. Content available for licensing was impacted by temporary production shutdowns as a result of labor strikes.
TV Media’s adjusted OIBDA decreased 7% year over year to $1.14 billion, due to the decline in advertising revenues, partially offset by lower costs for content and marketing.
Filmed Entertainment Details
Filmed Entertainment revenues increased 14% year over year to $891 million, as Theatrical revenues increased 63% year over year to $377 million.
Licensing revenues were $507 million, down 7% year over year. Advertising revenues increased 67% year over year to $5 million.
The company reported an adjusted OIBDA loss of $49 million compared with a positive adjusted OIBDA of $41 million in the year-ago period.
Balance Sheet
As of Sep 30, 2023, Paramount had cash and cash equivalents of $1.8 billion compared with $1.71 billion as of Jun 30.
Total debt, as of Sep 30, 2023, was $15.66 billion compared with a total debt of $15.8 billion as of Jun 30.
Zacks Rank & Stocks to Consider
Paramount currently carries a Zacks Rank #5 (Strong Sell).
Some better-ranked stocks in the Consumer Discretionary sector are PlayAGS AGS, AMark Precious Metals AMRK and American Public Education APEI. American Public Education sports a Zacks Rank #1 (Strong Buy), while PlayAGS and AMark Precious Metals carry a Zacks Rank #2 (Buy) each at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
PlayAGS, AMark Precious Metals and American Public Education are each scheduled to report the quarterly results on Nov 7.
The Zacks Consensus Estimate for AGS’ third-quarter 2023 earnings per share is pegged at 1 cent, up from a loss of 1 cent over the past 30 days.
The Zacks Consensus Estimate for AMRK’s third-quarter 2023 earnings is pegged at $1.88 per share, up 1.1% over the past 30 days.
The Zacks Consensus Estimate for APEI’s third-quarter 2023 loss is pegged at 25 cents per share, which has remained unchanged over the past 30 days.
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