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Paramount Global (PARA) Q1 Earnings Miss, Revenues Decline
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Paramount Global (PARA - Free Report) delivered adjusted earnings of 9 cents per share in first-quarter 2023, which missed the Zacks Consensus Estimate by 25% and declined 85% year over year.
Revenues of $7.26 billion missed the Zacks Consensus Estimate by 2.1% and declined 0.9% year over year, owing to decreased TV Media and Filmed Entertainment revenues.
Adjusted OIBDA dipped 40% from the year-ago quarter to $548 million.
Selling, general and administrative expenses increased 8.3% year over year to $1.75 billion.
Paramount Global Price, Consensus and EPS Surprise
Advertising revenues (36.5% of total revenues) of $2.65 billion decreased 7.4% year over year. Affiliate revenues (43.8% of total revenues) of $43.8 billion rose 5% year over year.
Content-licensing revenues (18% of total revenues) of $1.3 billion declined 12.4% year over year. Theatrical revenues totaled $127 million in the reported quarter, which dipped 3.1% year over year.
Segmental Details
Direct-To-Consumer Details
Direct-To-Consumer (DTC) revenues increased 39% year over year to $1.51 billion. DTC subscription revenues soared 50% year over year to $1.11 billion, reflecting paid subscriber growth on Paramount+, including the benefit from previous launches in international markets.
Paramount continues to demonstrate the strength of its content engine, driving momentum across streaming, television and theatrical. This resulted in Paramount+ and Pluto TV reaching significant milestones with 60 million subscribers and 80 million MAUs, respectively, while CBS is poised to claim the #1 spot in broadcast for the 15th straight season.
Global subscriber growth was driven by a strong content slate, including top originals like 1923, Tulsa King and the returns of Mayor of Kingstown and Star Trek: Picard, hit film franchises in Top Gun: Maverick and Teen Wolf: The Movie, and the NFL Playoffs.
Paramount+ revenues grew 65% year over year, driven by subscriber growth and increased advertising revenues. Paramount+ with SHOWTIME bundle also benefited from strong SHOWTIME content slate, including Your Honor and Yellowjackets.
According to Antenna, Paramount+ is the #1 premium streaming service in U.S. sign-ups in the quarter and since its launch in March 2021.
Pluto TV became the #1 FAST service globally. Pluto TV’s total global viewing hours grew 35% year over year.
DTC advertising revenues increased 15% year over year to $398 million, driven by strong engagement on Paramount+.
Adjusted OIBDA decreased $55 million year over year, reflecting higher costs to support growth of Paramount+.
TV Media Details
TV Media revenues decreased 8% year over year to $5.18 billion, which reflected a decline in advertising and affiliate revenues.
Advertising revenues dipped 11% year over year to $2.25 billion, reflecting weakness in the global advertising market and fewer NFL games on CBS and a 2% unfavorable impact from FX.
Affiliate and subscription revenues declined 1% year over year to $2.06 billion, driven by FX and the previous restructuring of certain international affiliate agreements, which resulted in a shift of revenues from pay television services to DTC services.
Licensing and other revenues moved down 15% year over year to $870 million due to a lower volume of licensed content.
TV Media’s adjusted OIBDA decreased 15% year over year to $1.3 billion, as the revenue decline was more than offset by lower costs.
Filmed Entertainment Details
Filmed Entertainment revenues declined 6% year over year to $588 million, as Theatrical revenues slipped $4 million, reflecting the timing and mix of releases.
Theatrical revenues of $127 million decreased 3% year over year. Licensing revenues were $456 million, down 7% year over year, driven primarily by lower consumer products licensing revenues.
Adjusted OIBDA dipped $62 million, reflecting adverse impacts of the timing of the release of Dungeons & Dragons: Honor Among Thieves on the last day of the quarter, as well as costs from the release of Miramax’s Operation Fortune: Ruse de Guerre and macro-driven softness in consumer products licensing.
Balance Sheet
As of Mar 31, 2023, Paramount had cash and cash equivalents of $2.1 billion compared with $2.88 billion as of Dec 31, 2022.
Total debt as of Mar 31, 2023, was $15.85 billion compared with a total debt of $15.8 billion as of Dec 31, 2022.
Zacks Rank & Stocks to Consider
Paramount currently carries a Zacks Rank #5 (Strong Sell).
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Paramount Global (PARA) Q1 Earnings Miss, Revenues Decline
Paramount Global (PARA - Free Report) delivered adjusted earnings of 9 cents per share in first-quarter 2023, which missed the Zacks Consensus Estimate by 25% and declined 85% year over year.
Revenues of $7.26 billion missed the Zacks Consensus Estimate by 2.1% and declined 0.9% year over year, owing to decreased TV Media and Filmed Entertainment revenues.
Adjusted OIBDA dipped 40% from the year-ago quarter to $548 million.
Selling, general and administrative expenses increased 8.3% year over year to $1.75 billion.
Paramount Global Price, Consensus and EPS Surprise
Paramount Global price-consensus-eps-surprise-chart | Paramount Global Quote
Revenues by Type
Advertising revenues (36.5% of total revenues) of $2.65 billion decreased 7.4% year over year. Affiliate revenues (43.8% of total revenues) of $43.8 billion rose 5% year over year.
Content-licensing revenues (18% of total revenues) of $1.3 billion declined 12.4% year over year. Theatrical revenues totaled $127 million in the reported quarter, which dipped 3.1% year over year.
Segmental Details
Direct-To-Consumer Details
Direct-To-Consumer (DTC) revenues increased 39% year over year to $1.51 billion. DTC subscription revenues soared 50% year over year to $1.11 billion, reflecting paid subscriber growth on Paramount+, including the benefit from previous launches in international markets.
Paramount continues to demonstrate the strength of its content engine, driving momentum across streaming, television and theatrical. This resulted in Paramount+ and Pluto TV reaching significant milestones with 60 million subscribers and 80 million MAUs, respectively, while CBS is poised to claim the #1 spot in broadcast for the 15th straight season.
Global subscriber growth was driven by a strong content slate, including top originals like 1923, Tulsa King and the returns of Mayor of Kingstown and Star Trek: Picard, hit film franchises in Top Gun: Maverick and Teen Wolf: The Movie, and the NFL Playoffs.
Paramount+ revenues grew 65% year over year, driven by subscriber growth and increased advertising revenues. Paramount+ with SHOWTIME bundle also benefited from strong SHOWTIME content slate, including Your Honor and Yellowjackets.
According to Antenna, Paramount+ is the #1 premium streaming service in U.S. sign-ups in the quarter and since its launch in March 2021.
Pluto TV became the #1 FAST service globally. Pluto TV’s total global viewing hours grew 35% year over year.
DTC advertising revenues increased 15% year over year to $398 million, driven by strong engagement on Paramount+.
Adjusted OIBDA decreased $55 million year over year, reflecting higher costs to support growth of Paramount+.
TV Media Details
TV Media revenues decreased 8% year over year to $5.18 billion, which reflected a decline in advertising and affiliate revenues.
Advertising revenues dipped 11% year over year to $2.25 billion, reflecting weakness in the global advertising market and fewer NFL games on CBS and a 2% unfavorable impact from FX.
Affiliate and subscription revenues declined 1% year over year to $2.06 billion, driven by FX and the previous restructuring of certain international affiliate agreements, which resulted in a shift of revenues from pay television services to DTC services.
Licensing and other revenues moved down 15% year over year to $870 million due to a lower volume of licensed content.
TV Media’s adjusted OIBDA decreased 15% year over year to $1.3 billion, as the revenue decline was more than offset by lower costs.
Filmed Entertainment Details
Filmed Entertainment revenues declined 6% year over year to $588 million, as Theatrical revenues slipped $4 million, reflecting the timing and mix of releases.
Theatrical revenues of $127 million decreased 3% year over year. Licensing revenues were $456 million, down 7% year over year, driven primarily by lower consumer products licensing revenues.
Adjusted OIBDA dipped $62 million, reflecting adverse impacts of the timing of the release of Dungeons & Dragons: Honor Among Thieves on the last day of the quarter, as well as costs from the release of Miramax’s Operation Fortune: Ruse de Guerre and macro-driven softness in consumer products licensing.
Balance Sheet
As of Mar 31, 2023, Paramount had cash and cash equivalents of $2.1 billion compared with $2.88 billion as of Dec 31, 2022.
Total debt as of Mar 31, 2023, was $15.85 billion compared with a total debt of $15.8 billion as of Dec 31, 2022.
Zacks Rank & Stocks to Consider
Paramount currently carries a Zacks Rank #5 (Strong Sell).
Some better-ranked stocks in the Consumer Discretionary sector are BuzzFeed (BZFD - Free Report) , Bragg Gaming Group Inc. (BRAG - Free Report) and PlayAGS (AGS - Free Report) , each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Both BuzzFeed and Bragg Gaming are scheduled to report their quarterly results on May 9. PlayAGS is set to release its quarterly report on May 10.
The Zacks Consensus Estimate for BZFD’s first-quarter 2023 earnings is pegged at a loss of 29 cents per share, unchanged over the past 30 days.
The Zacks Consensus Estimate for BRAG’s first-quarter 2023 earnings is pegged at a loss of 3 cents per share, unchanged over the past 30 days.
The Zacks Consensus Estimate for AGS’ first-quarter 2023 earnings is pegged at a loss of 8 cents per share, unchanged over the past 30 days.