Paramount Global PARA shares dropped 3.21% in pre-market trading to $10.86 after reporting an adjusted loss of 11 cents per share for the fourth quarter of 2024, in contrast to the Zacks Consensus Estimate of an earnings of 10 cents. The company had registered earnings of 4 cents per share in the year-ago quarter.
Find the latest EPS estimates and surprises on Zacks Earnings Calendar.
Revenues of $7.98 billion missed the Zacks Consensus Estimate by 1.94%. The figure increased 4.5% year over year. The performance was impacted by softness in TV Media revenues.
Consolidated adjusted OIBDA fell 21.9% from the year-ago quarter’s level to $406 million, affected by higher company-wide variable compensation and actions to mitigate 280G exposure, leading to $90 million in unexpected expenses.
Paramount Global Price, Consensus and EPS Surprise
Paramount Global price-consensus-eps-surprise-chart | Paramount Global Quote
Selling, general and administrative expenses decreased 4.4% year over year to $1.89 billion.
The Skydance transaction is expected to close in the first half of 2025. Meanwhile, Paramount remains focused on leveraging its content assets, investing in sports, major film and TV franchises, and streaming originals to drive DTC growth.
PARA’s Revenue Details
Advertising revenues (34.7% of total revenues) of $2.77 billion down 1.3% year over year. Affiliate revenues (41.4% of total revenues) of $3.31 billion declined 1.1% year over year. Theatrical revenues (5.2% of total revenues) totaled $414 million in the reported quarter, which increased 430.8% year over year. Licensing and other revenues (18.7% of total revenues) of $1.49 billion increased 5.8% year over year.
PARA’s Segment Details
DTC Details
DTC revenues increased 7.7% year over year to $2.01 billion. Its subscription revenues grew 7.3%, driven by subscriber growth.
DTC saw strong momentum in the reported quarter, with earnings improvement, subscriber growth and record engagement driving revenues. Paramount+ added 5.6 million subscribers in the reported quarter, the best in two years. achieved a new milestone, ranking as the second-highest domestic subscription video-on-demand service for hours watched across all Original Series in the fourth quarter. Pluto TV had a record year, with viewing hours increasing 16% in the fourth quarter year over year and 8% for the full year.
DTC advertising revenues rose 9.1%, driven by growth in Paramount+ and Pluto TV, along with higher political advertising.
Global viewing hours across Paramount+ and Pluto TV grew 28% year over year. Paramount+ subscribers reached 77.5 million, with 5.6 million net additions in the quarter. Paramount+ global ARPU increased 1%, while its domestic watch time per user reached a record high and increased 22% year over year.
DTC adjusted OIBDA improved $204 million year over year, indicating revenue growth and cost efficiencies.
TV Media Details
TV Media revenues decreased 3.7% year over year to $4.98 billion, due to ongoing declines in affiliate and advertising revenues.
The segment’s advertising revenues decreased 3.7%, primarily due to a weaker linear advertising market and fewer sporting events on CBS, though partially offset by increased political advertising.
TV Media affiliate and subscription revenues decreased 6.7%, caused by subscriber declines, though partially offset by price increases.
The segment’s licensing and other revenues increased 3.3% in the quarter, primarily driven by secondary licensing growth, partially offset by fewer made-for-third-party productions.
TV Media adjusted OIBDA decreased 17% to $949 million, caused by the lower revenues.
It continues to dominate the linear landscape with top-performing content across broadcast and cable. The NFL on CBS secured three of the top four regular-season games, with streaming viewership surging nearly 60%. Yellowstone's return on Paramount Network set new records, attracting 18 million premiere-night viewers and maintaining its position as the number 1 cable show. The Daily Show remains the top cable entertainment series in Late Night, while MTV’s The Challenge leads as the top competition series on cable. Nickelodeon also continues its strong appeal, with SpongeBob ranking as the number one kids' series and a top performer on Paramount+.
Filmed Entertainment Details
Filmed Entertainment revenues increased 67.1% year over year to $1.08 billion. Theatrical revenues increased $336 million, driven by the releases of Gladiator II and Sonic the Hedgehog 3.
Licensing and other revenues increased 16.8%, indicating a higher volume of licensing of library titles and higher studio facility revenues compared with last year, which was impacted by the labor strikes.
The company reported an adjusted OIBDA loss of $42 million, down from $66 million year over year, due to higher marketing costs for five theatrical releases versus one last year and the late-quarter release of Sonic 3.
Paramount Pictures saw strong fourth-quarter revenue growth, driven by Sonic the Hedgehog 3, nearing $500 million globally as the franchise’s highest-grossing film. The Sonic series has now reached $1.2 billion worldwide. Gladiator II surpassed $460 million, while Smile 2 debuted at number 1, outperforming its predecessor’s opening weekend, showcasing the studio’s balanced theatrical success.
PARA’s Balance Sheet & Cash Flow Details
As of Dec. 31, 2024, Paramount Global had cash and cash equivalents of $2.66 billion compared with $2.44 billion as of Sept. 30, 2024.
Total debt, as of Dec. 31, 2024, was $14.5 billion compared with $14.6 billion as of Sept. 30, 2024.
The non-GAAP free cash flow was $56 million compared with $214 million reported in the previous quarter.
Zacks Rank & Stocks to Consider
Paramount Global currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the Consumer Discretionary sector are Flutter Entertainment FLUT, Life Time Group Holdings LTH and Accel Entertainment ACEL, each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Shares of Flutter Entertainment have raised 5.7% year to date. FLUT is set to report fourth-quarter 2024 results on March 04.
Shares of Life Time Group Holdings have gained 42.9% year to date. LTH is set to report fourth-quarter 2024 results on Feb. 27.
Shares of Accel Entertainment have returned 11.1% year to date. ACEL is set to report fourth-quarter 2024 results on Feb. 27.
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This article originally published on Zacks Investment Research (zacks.com).
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