Paramount Global fell short of Wall Street estimates for quarterly revenue on Wednesday, weighed by intense competition from streaming rivals and a weak advertising market.
Shares of the company fell nearly 2% in trading after the bell.
The media industry has been grappling with a changing landscape of streaming gaining dominance over traditional television and the impact from the Hollywood strikes last year.
A soft advertising market and economic uncertainties have added to the pressure.
The media conglomerate reported overall fourth-quarter revenue of $7.64 billion, missing analysts’ estimate of $7.85 billion, according to LSEG data.
“We now expect to reach domestic Paramount+ profitability in 2025,” CEO Bob Bakish said.
Paramount+, the company’s flagship streaming platform, added 4.1 million subscribers during the quarter, compared with 2.7 million in the previous quarter. The figure was slightly above the estimate of 4.03 million new subscribers, according to data from Visible Alpha.
The company has been pumping money into its fast-growing but unprofitable streaming unit Paramount+, saying in November the investments had peaked a year ahead of the target.
The results come when the US entertainment industry is abuzz with fresh consolidation moves. Reuters reported in January, citing a source, that Skydance Media CEO David Ellison was exploring an all-cash bid to acquire entertainment company Paramount Global’s parent, National Amusements.
On Tuesday, CNBC reported that Warner Bros Discovery was no longer pursuing a merger with Paramount Global, halting talks after several months of kicking the tires on merging the media companies.
Paramount reported a surprise profit of 4 cents per share, while analysts were expecting a loss of 1 cent.
Revenue in the company’s direct-to-consumer unit, which includes streaming platforms Paramount+ and PlutoTV, grew 34% in the quarter. Revenue from its filmed entertainment business fell 31%.
The studio is home to film franchises such as “Top Gun” and “Mission: Impossible,” as well as the hit television show “Yellowstone.”
Sales for its TV media segment declined by 12% from a year earlier and advertising revenue fell by 15%, impacted by lower political advertising and the twin Hollywood strikes.
This story originally appeared on NYPost
