Paramount Global (PARA) shares slumped lower Wednesday after the media group posted weaker-than-expected third quarter earnings amid a slump in ad sales and increased competition in streaming entertainment.
Paramount said diluted earnings for the three months ending in September fell nearly 49% from last year to 39 cents a share, firmly shy of the Street consensus forecast of 44 cents per share. Group revenues, Paramount said, were down 4.6% from last year at $6.916 billion, again missing analysts' estimates of a $7.02 billion tally.
Ad sales, Paramount said, were down 4% from last year to 363 million, leading to a 5% decline in revenues for its TV Media division, the group's largest.
"In the third quarter, Paramount continued to execute on our differentiated strategy anchored by our broad range of popular content, our diverse portfolio of platforms, and our truly global operating reach," said CEO Bob Bakish. "That strategy continued to drive growth in subscriptions across our streaming platforms with Paramount+ adding 4.6 million subscribers. Paramount Pictures also extended its stellar run with its sixth #1 film in 2022."
"Looking forward, we couldn’t be more excited about the array of sensational content coming to Paramount+ in the fourth quarter, as well as the launch of the service in France, Germany, Austria and Switzerland," he added.
Paramount shares were marked 11.5% lower in early Wednesday trading to change hands at $16.96 each, extending the stock's year-to-date decline to around 50%.
Paramount, which changed its name from ViacomCBS earlier this year, owns the Paramount CBS, Showtime, MTV and Comedy Central brands and hopes to have at least 100 million streaming subscribers by the end of 2024.
Third quarter subscription revenues were up 59% from last year to $863 million, paced by growth in its Paramount+ streaming offering, which includes NFL games and soccer matches from the UEFA Champions League.
