Paramount Global’s quarterly revenue disappoints Wall Street

Paramount Global’s quarterly revenue disappointed Wall Street on Wednesday, despite posting a profit boosted by streaming gains that overshadowed a sluggish advertising market.

Following the announcement, the media conglomerate’s shares surged nearly two percent after the bell, reflecting investors’ optimism in light of the evolving entertainment industry landscape.

Streaming services have steadily gained dominance over traditional television, a trend exacerbated by Hollywood’s strikes last year and a subdued advertising market. Paramount Global’s fourth-quarter revenue totaled $7.64 billion, falling short of analysts’ estimates of $7.85 billion, according to a Reuters report.

However, the company surprised analysts by reporting a profit of 4 cents per share, defying expectations of a 1 cent loss.

CEO Bob Bakish expressed optimism about the future, stating, “We now expect to reach domestic Paramount+ profitability in 2025.”

Paramount+, the company’s flagship streaming platform, experienced significant subscriber growth during the quarter, adding 4.1 million compared to the previous quarter’s 2.7 million. This growth exceeded expectations, with figures slightly surpassing the estimated 4.03 million new subscribers, as reported by data from Visible Alpha.

Paramount Global’s substantial investments in Paramount+ have contributed to its expansion. The company previously announced in November that investments in the streaming unit had peaked, a year ahead of schedule.

Despite challenges posed by a turbulent advertising market, Paramount Global remains committed to growth strategies. Revenue from its TV media segment declined by 12 percent year-over-year, while advertising revenue fell by 15 percent, primarily impacted by reduced political advertising and the effects of Hollywood strikes.

However, the company’s finance chief, Naveen Chopra, expressed cautious optimism, noting signs of stabilization in the ad market. Paramount Global anticipates reporting “low to mid-teens advertising growth” in the first quarter, indicating a potential rebound in advertising revenue.

The latest financial results from Paramount Global come amid ongoing consolidation efforts within the US entertainment industry. In January, reports emerged regarding Skydance Media CEO David Ellison’s exploration of an all-cash bid to acquire Paramount Global’s parent company, National Amusements.