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Earnings: Paramount mixed, Kraft Heinz and Shopify top estimates

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Yahoo Finance takes a look at earnings reports that came out on Wednesday morning.

Video Transcript

BRIAN SOZZI: All right. We're still watching a whole lot of other stocks this morning, Julie. Let's start with Viacom or CBS, or should I say Paramount, because the company is now changing its name to Paramount from ViacomCBS. A lot going on last night. The company reported earnings, Julie.

The market did not like those earnings. But also, threw an investor day in there as well highlighting their new name change, a lot of new programming, and also, big expectations around their subscribers, laying out 100 million streaming subscriber guidance by 2024. For last year, they ended the quarter with about 54 million or so in streaming subscribers. So a lot going on at this company.

JULIE HYMAN: A lot going on. And this is the first time that this company, now Paramount, AKA ViacomCBS, has broken out Paramount Plus streaming subscriptions. Before, it revealed the number along with Showtime and BET Plus as a collective number. So those Paramount Plus subscriptions alone rose by 7 million in the fourth quarter as of the fourth quarter to $32.8 million.

Now, it's still very small versus the other big streaming services, but that growth is comparable to some of them even though ViacomCBS, or should I say Paramount Plus, does not have the same international exposure that some of the other streaming services like the likes of Netflix have, for example. So that 9.4 million streaming subscription ad that you're looking at for the fourth quarter is for all of those three services-- Paramount Plus, Showtime, and BET Plus. And that 100 million that you mentioned, the goal by 2024, is collectively for those services.

Where you're seeing the big disappointment this morning that's reflected in the shares, seemingly, is their earnings per share miss, which was sizable. $0.26 was the earnings per share. $0.45 is what analysts have been looking for. The company did say sales rose by 16%. And it did have revenue from streaming, but advertising and affiliate sales were flat. So perhaps that is also a source of some disappointment.

I know one thing I'm not disappointed about, Brian Sozzi-- they're rebooting "Beavis and Butthead." Because everything, apparently, from the '90s is coming back. Are you ready?

BRIAN SOZZI: You guys teed that up for me, Julie. Yes, I am extremely excited because I remember as a kid, we had no cable, no cable in the Sozzi household. So I had to sneak over to my friend's house to catch the latest "Beavis and Butthead." And when I couldn't do that, I had to pretend in school that I actually saw the latest episode when I really didn't.

So I'm very excited to see this franchise. And how you know life, in fact, does come full circle, Julie-- we can ask ViacomCBS or Paramount CFO Naveen Chopra all about Beavis and Butthead and their subscriber outlook. We'll be talking to him in the next hour. Very much looking forward to hearing him and why they're bringing back this legendary series. I will not try to do my Beavis or Butthead impersonation live on global television right now.

But switching gears, look, Kraft Heinz, Julie, also with earnings here. Not much to say on them per se. Another company-- another big food company, I should mention, that is lifting prices. Kraft Heinz noting pricing in the quarter up 3.8%. And that was a big driver of their better-than-expected results. Hence, you're seeing the stock pop here.

JULIE HYMAN: You are seeing the stock pop. But again, I come back to the question that we've been talking a lot about this week, and that is, where is the resistance point going to come? And I do wonder as well, when you look across different types of product categories, are people more willing to spend more at, say, a Chipotle-- just throwing it out there-- or on a clothing item if they're getting ready to go back out into the world than they are on a food staple from Kraft Heinz? We've seen this trend of indulgence throughout the pandemic that has been continuing. We've been hearing that from the likes of Hershey's CFO, who we spoke to recently.

But I wonder how far that goes. Or are people-- maybe if they don't trade down, are you going to buy one bag of potato chips or whatever it may be instead of two or three or five? And I just keep looking for that pushback and that resistance and places for it to show up.

BRIAN SOZZI: Well, if that Kraft Heinz mac and cheese hits $10 a box, I'm not a buyer. Julie, I know you're also watching shares of Shopify too. The stock is going to absolutely blasted here, down about 16%, a top trending ticker on the Yahoo Finance platform.

JULIE HYMAN: Man, mac and cheese is a staple in my household. If it gets that much, we're definitely in trouble. Shopify-- yes, it expects revenue growth is going to be lower this year, so slowing growth coming for Shopify. And it's not necessarily a surprise in general because of the pandemic boost that a company like Shopify got. And you can see last quarter, the numbers beat. But in a statement, Shopify saying that COVID-triggered acceleration of e-commerce that spilled into the first half of 2021 in the form of lockdowns and government stimulus will be absent from 2022. There was caution around inflation and consumer spend near term for the full year.

So again, these disconnects and dislocations that we're watching in the market-- you get a retail sales number and a non-store retail sales number like we did today, on the one hand, and then you get the Shopify outlook on the other hand, which raises questions about the sustainability of some of these increases. By the way, when I say the full-year revenue growth is going to be slowing for Shopify, in 2021, it was 57%. So it's not being very specific, but it's saying it's going to be lower than 57%. But that still leaves a lot of room for growth. It's just not necessarily the growth that investors have been accustomed to for the likes of a Shopify and that is priced into the stock.

BRIAN SOZZI: Tough session for Shopify. They can just hop on that list with roadblocks here, really being a really bad Wednesday for them.