It has been about a month since the last earnings report for Paramount Global-B (PARA Quick QuotePARA - Free Report) . Shares have lost about 16.5% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Paramount Global-B due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.

Paramount Global Q2 Earnings Fall Y/Y, Revenues Beat

Paramount Global delivered adjusted earnings per share (EPS) of 10 cents in second-quarter 2023, which declined 84% year over year. The Zacks Consensus Estimate for loss was pegged at 1 cent per share.

Revenues of $7.61 billion beat the Zacks Consensus Estimate by 2.5%. The figure declined 2% year over year, owing to a decrease in TV Media and Filmed Entertainment revenues.

Adjusted OIBDA decreased 37% from the year-ago quarter’s level to $606 million.

Selling, general and administrative expenses increased 4.3% year over year to $1.78 billion.

Revenues by Type

Advertising revenues (31.4% of total revenues) of $2.39 billion decreased 5.9% year over year. Affiliate revenues (42.4% of total revenues) of $3.2 billion increased 12% year over year.

Content-licensing revenues (23% of total revenues) of $1.75 billion increased 10.9% year over year. Theatrical revenues totaled $231 million in the reported quarter, which decreased 69.8% year over year.

Segment Details

Direct-To-Consumer Details

Direct-To-Consumer (DTC) revenues increased 40% year over year to $1.66 billion, driven by subscriber growth and improvements in engagement and monetization. DTC subscription revenues soared 47% year over year to $1.22 billion, reflecting paid subscriber growth on Paramount+.

Paramount+ revenue grew 47%, driven by subscriber growth and increased advertising revenues. Paramount+ subscribers reached approximately 61 million, with 0.7 million additions in the quarter. The company witnessed 35% growth in total viewing hours across Paramount+ and Pluto.

DTC advertising revenues increased 21% year over year to $441 million, driven by higher impressions for Paramount+ and Pluto TV.

Adjusted OIBDA decreased $424 million year over year, reflecting higher costs to support growth of Paramount+.

TV Media Details

TV Media revenues decreased 2% year over year to $5.15 billion, which reflected a decline in advertising and affiliate revenues.

Advertising revenues decreased 10% year over year to $1.94 billion, reflecting weakness in the global advertising market. In the national domestic market, pharma, retail, movies and travel are showing signs of strength.

Affiliate and subscription revenues declined 2% year over year to $2.01 billion, primarily reflecting the impact of subscriber declines, partially offset by pricing increases.

Licensing and other revenues increased 17% year over year to $1.2 billion.

TV Media’s adjusted OIBDA decreased 13% year over year to $1.19 billion, driven by the decline in advertising and affiliate revenues, partially offset by higher profits from licensed content.

Filmed Entertainment Details

Filmed Entertainment revenues decreased 39% year over year to $831 million, as Theatrical revenues decreased 70% year over year to $231 million due to the release of Top Gun: Maverick in the prior-year period.

Licensing revenues were $456 million, which remained flat year over year.

Adjusted OIBDA decreased 97% year over year to $5 million, reflecting the timing and mix of theatrical releases each year.

Balance Sheet

As of Jun 30, 2023, Paramount had cash and cash equivalents of $1.71 billion compared with $2.1 billion as of Mar 31.

Total debt, as of Jun 30, 2023, was $15.8 billion compared with a total debt of $15.85 billion as of Mar 31.

How Have Estimates Been Moving Since Then?

It turns out, fresh estimates have trended downward during the past month.

The consensus estimate has shifted -59.41% due to these changes.

VGM Scores

At this time, Paramount Global-B has a subpar Growth Score of D, however its Momentum Score is doing a lot better with a B. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Paramount Global-B has a Zacks Rank #5 (Strong Sell). We expect a below average return from the stock in the next few months.