HomeMost PopularInvestingParamount Global's Revenue Woes: Earnings Show Strong Beat, But Miss the Mark...

Paramount Global’s Revenue Woes: Earnings Show Strong Beat, But Miss the Mark on Revenues

Actionable Trade Ideas

always free

Parameter Up, Revenue Down

Paramount Global (PARA) had a rollercoaster ride in the fourth quarter of 2023. The company managed to deliver adjusted earnings of 4 cents per share, trumping the Zacks Consensus Estimate despite a 50% year-over-year decline. However, the good news came with a bitter pill to swallow as revenues dipped by 6% year over year, coming in at $7.64 billion, missing the Zacks Consensus Estimate by 1.88%.

A Deeper Dive into the Numbers

The decrease in revenues was primarily due to a mixed bag: While Direct-to-Consumer revenues saw a rise, this was overshadowed by a decline in both TV Media and Filmed Entertainment revenues. Adjusted OIBDA also took a hit, decreasing by 15% from the previous year to $520 million. On the brighter side, selling, general, and administrative expenses were down 3% to $1.97 billion.

A Story of Revenues by Type

Breaking down the revenue sources, Affiliate revenues saw a healthy increase of 12.9% year over year, accounting for a significant portion of the total revenues. Meanwhile, Theatrical revenues took a tumble, dropping by 19.6%. Advertising revenues shrunk by 10.6%, while Content-licensing revenues plummeted by 27% year over year.

The Segments Unveiled

Direct-to-Consumer (DTC) Insights

The DTC segment experienced a significant uptick, with revenues jumping by 33.9% year over year to $1.87 billion. Paramount+ stood out, with its revenues soaring by 68.7%, driven by a surge in subscribers and increased advertising revenues. DTC advertising revenues also saw a healthy increase.

On the flip side, the company reported an adjusted OIBDA loss of $490 million due to higher costs, despite a notable increase in revenues.

TV Media reflection

The TV Media segment saw a decline in revenues, with TV Media revenues dropping by 12.2% year over year. This downfall was primarily driven by a significant decrease in advertising revenues, signaling softness in the global advertising market. Adjusted OIBDA took a hit, decreasing by 11.9% year over year.

Filmed Entertainment Shadows

Filmed Entertainment revenues suffered a significant drop of 30.9% year over year, with both Theatrical and Licensing revenues taking a hit. The company reported an adjusted OIBDA of $24 million, a stark contrast to the positive adjusted OIBDA of $87 million in the same period the previous year.

Balance Sheet Insight

On the balance sheet front, as of December 31, Paramount had cash and cash equivalents of $2.46 billion, showing a notable increase compared to the previous quarter. Total debt also saw a decrease, standing at $14.6 billion as of December 31, compared to $15.66 billion in the previous quarter.

Glimmer of Hope?

Despite the mixed bag of financial results, Paramount Global currently holds a Zacks Rank #3 (Hold). Investors eyeing the sector might consider other options like Crowdstrike (CRWD), SEMrush (SEMR), and Adobe (ADBE) as better-ranked stocks.

Bearing in mind the ebbs and flows of Paramount’s financial performance, the future remains uncertain, prompting investors to tread cautiously in the ever-evolving market landscape.

Swing Trading Ideas and Market Commentary

Need some new swing ideas? Get free weekly swing ideas and market commentary from Jonathan Bernstein here: Swing Trading.

Explore More

Weekly In-Depth Market Analysis and Actionable Trade Ideas

Get institutional-level analysis and trade ideas to take your trading to the next level, sign up for free and become apart of the community.