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Paramount misses quarterly revenue estimate, but streaming grows

Stock Markets May 03, 2022 11:25AM ET
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2/2 © Reuters. Toy figures of people are seen in front of the displayed Paramount + logo, in this illustration taken January 20, 2022. REUTERS/Dado Ruvic/Illustration 2/2

By Eva Mathews and Helen Coster

(Reuters) -Paramount Global reported forecast-missing quarterly revenue on Tuesday that sent its shares down 6%, but the media giant still added millions of streaming subscribers.

Total revenue fell about 1% to $7.33 billion in the first quarter, below analysts' estimates of $7.38 billion, according to IBES data from Refinitiv.

Paramount said revenue in its TV media segment, its highest revenue generator, fell 6% compared to last year when CBS' broadcast of Super Bowl LV - a championship this year carried by Comcast (NASDAQ:CMCSA) Corp-owned NBC - brought more viewers and ad revenue.

The results come at a time when Wall Street has raised concerns over the long-term viability of streaming as the pandemic boom fades, with rival service Netflix Inc (NASDAQ:NFLX) losing 200,000 subscribers in the first quarter.

"We see risk to potentially saturated and highly competitive streaming-addressable markets in both the U.S. and overseas," wrote CFRA analyst Kenneth Leon in a note on Tuesday.

Paramount+ saw growth in the quarter, adding 6.8 million subscribers on the back of titles such as "Scream" and "The Lost City".

Revenue in the company's direct-to-consumer business, which includes Paramount+, increased 82% due to a 59% jump in ad sales and a 95% increase in subscription revenues.

On a call with investors, Paramount Global Chief Executive Officer Bob Bakish said the company will bring Paramount+ to India in 2023 through its joint venture Viacom18, following Walt Disney (NYSE:DIS) Co's tie-up with Hotstar, a sports and regional content favorite.

The company’s chief financial officer said on the call that the Russia-Ukraine conflict will cut direct-to-consumer subscriber growth by 3 million in the second quarter, roughly two-thirds of whom are subscribers to a non-Paramount+ service specific to the Russian market.

Revenue in the company's filmed entertainment business fell by about 27% in the quarter due to lower licensing revenue.

Net earnings attributable to Paramount fell to $433 million, from $911 million a year earlier.

Excluding items, the media giant earned a profit of 60 cents per share in the quarter ended March 31, above expectations of 51 cents.

Paramount misses quarterly revenue estimate, but streaming grows

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