Paramount Global (PARA Quick QuotePARA - Free Report) delivered third-quarter 2022 adjusted earnings of 39 cents per share, which missed the Zacks Consensus Estimate by 9.3% and declined 48.7% year over year.

Revenues of $6.91 billion missed the Zacks Consensus Estimate by 1.9% but improved 4.6% year over year, owing to an increase in Direct-to-Consumer (DTC) revenues.

Adjusted OIBDA declined 23% from the year-ago quarter’s level to $786 million.

Selling, general and administrative expenses increased 9.4% year over year to $1.67 billion.

Revenues by Type

Advertising revenues of $2.33 billion decreased 2.1% year over year. Affiliate revenues of $2.86 billion increased 8% year over year.

Theatrical revenues totaled $231 million in the reported quarter compared with the year-ago quarter’s $67 million. Content-licensing revenues of $1.48 billion declined 1.5% year over year.

Segment Details

Direct-To-Consumer revenues increased 38% year over year to $1.22 billion. Direct-To-Consumer subscription revenues soared 59% year over year to $863 million, reflecting paid subscriber growth on Paramount+. Paramount+ revenues grew 95% year over year.

Global streaming subscribers rose to nearly 67 million, which included the addition of 4.7 million DTC subscribers.

Paramount+ subscribers grew to 46 million, which reflects the addition of 4.6 million subscribers and the removal of 1.9 million Paramount+ subscribers, following the launch of SkyShowtime to replace Paramount+ in the Nordics. Paramount+ subscriber growth was driven by launches in international markets as well as the start of the NFL season, UEFA Champions League, and the launch of the Walmart+ partnership.

Internationally, Paramount+ saw strong engagement and consumption due to a variety of content, including Halo and Yellowstone.

Pluto TV maintained its lead as the #1 free ad-supported streaming tv service in the U.S. Pluto TV’s global monthly active users increased to nearly 72 million. Pluto TV’s total global viewing hours grew by strong double-digits year-over-year.

Direct-To-Consumer advertising revenues increased 4% year over year to $363 million, reflecting growth from Pluto TV and Paramount+, driven by increased pricing and impressions on both services.

TV Media revenues decreased 5% year over year to $4.94 billion, which reflected decline in advertising and affiliate revenues.

Advertising revenues decreased 3% year over year to $1.97 billion, as increases from political advertising and pricing only partially offset the impact from lower impressions and FX.

Affiliate and subscription revenues declined 5% year over year to $2 billion, as rate increases only partially offset net pay television subscriber declines.

Licensing and other revenues declined 9% year over year to $975 million due to the comparison against several significant domestic licensing arrangements in the prior year.

TV Media’s adjusted OIBDA decreased 11% year over year to $1.23 billion, due to decline in affiliate and subscription revenues and lower profits from content licensing.

Filmed Entertainment revenues increased 48% year over year to $783 million, owing to the success of Top Gun: Maverick at the box office and in the digital home entertainment market.

Theatrical revenues of $231 million increased by $245 million year over year. Paramount Pictures achieved its sixth #1 box office film of the year with horror thriller Smile.

 Licensing revenues were $549 million, up 19% year over year.

Balance Sheet

As of Sep 30, 2022, Paramount had cash and cash equivalents of $3.38 billion compared with $4.03 billion as of Jun 30, 2022.

Paramount Global’s committed $3.5 billion revolving credit facility remains undrawn.

Total debt as of Sep 30, 2022, was $15.7 billion, compared to a total debt of $15.8 billion as of Jun 30, 2022.

Zacks Rank & Stocks to Consider

Paramount currently carries a Zacks Rank #3 (Hold).

The company’s shares have declined 36.5% in the year-to-date period compared with the Zacks Consumer Discretionary sector’s decline of 36.4%.

Some better-ranked stocks in the Consumer Discretionary sector include AMC Entertainment (AMC Quick QuoteAMC - Free Report) , Reservoir Media (RSVR Quick QuoteRSVR - Free Report) and American Public Education (APEI Quick QuoteAPEI - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

AMC Entertainment, Reservoir Media and American Public Education are each scheduled to report their quarterly results on Nov 8.

The Zacks Consensus Estimate for AMC Entertainment’s third-quarter 2022 loss is pegged at 27 cents per share, widening from a loss of 25 cents over the past 30 days.

The Zacks Consensus Estimate for Reservoir Media’s third-quarter 2022 earnings is pegged at 5 cents per share, unchanged over the past 30 days.

The consensus mark for American Public Education’s third-quarter 2022 earnings is pegged at 25 cents per share, unchanged in the past 30 days.