Paramount Global Profit Drops as Ad Revenue Slumps

By
Bill McColl
Bill McColl
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Bill McColl has 25+ years of experience as a senior producer and writer for TV, radio, and digital media leading teams of anchors, reporters, and editors in creating news broadcasts, covering some of the most notable news stories of the time.

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Published February 16, 2023
Paramount+

Paramount

Key Takeaways

  • Paramount Global (PARA) announced financial results for the fourth quarter of 2022 on Thursday, Feb. 16.
  • The entertainment company fell short of analysts' expectation on revenue and profit, sending its share price lower.
  • The company noted a decline in ad revenue and announced price increases for its Paramount+ streaming service.

Paramount Global (PARA) shares fell after it significantly missed quarterly earnings estimates as TV ad revenue dropped, and it announced a price hike for its Paramount+ streaming service.

The media company posted fourth quarter profit of $0.08 per share, just a third of what analysts had been anticipating. Revenue rose 1.7% to $8.13 billion, also short of forecasts.

Ad sales at its TV Media unit dipped 6.6% to $5.88 billion. The company indicated that a boost in customer spending on political commercials could not overcome a drop in impressions and currency fluctuations. Streaming revenue was up 30.2% to $1.4 billion, and its Paramount+ service added a record 9.9 million subscribers, giving it 56 million.

Paramount+ Price Hike

The company explained that when Paramount+ combines with Showtime in the third quarter, the price of the ad-free Paramount+ premium tier, which will include Showtime, will go up to $11.99 per month from $9.99. The monthly cost of the basic plan without Showtime and with ads will increase to $5.99 from $4.99.

CEO Bob Bakish was bullish on Paramount's long-term future, saying "we expect to return the company to earnings growth in 2024."

Shares of Paramount Global were down 4% on Feb. 16, and they've lost about a third of their value in the past year.

Chart showing the percentage price change in shares of Paramount Global (PARA) over the past year

YCharts
Article Sources
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  1. Paramount. "Paramount Reports Q4 and Full Year 2022 Earnings Results."

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