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Paramount Global PARA.O missed quarterly revenue estimates on Friday, as weakness in the media giant’s studio and cable businesses outweighed strong subscriber growth for its streaming service following the return of the NFL.
Its shares fell 3.7% in early trading, even as third-quarter profit beat Wall Street expectations thanks to cost containment and a surge in subscribers to the streaming service .
A lineup of content including the National Football League (NFL), the second season of the crime series “Tulsa King” and the horror film “A Quiet Place: Day One” helped streaming service Paramount+ add 3, 5 million subscribers in the third quarter.
This figure is higher than Visible Alpha’s estimates, which expected 2.46 million additions and marks a clear turnaround from the 2.8 million subscribers the service lost during the previous quarter.
Revenue at Paramount’s TV media business, which includes CBS and MTV, fell 6% due to lower advertiser spending and fewer subscribers.
Customers have shunned cable TV in favor of streaming platforms, eroding a lucrative profit engine for media companies and pushing them to seek options for their traditional businesses.
Paramount’s total revenue for the third quarter ($6.73 billion) was lower than expectations ($6.95 billion), according to data compiled by LSEG. Revenue from its filmed entertainment business fell 34%.
The studio released only one major film this quarter – the animated film “Transformers One” – which grossed $127 million at the worldwide box office.
STREAMING SHINES
Paramount’s streaming business reported an adjusted operating profit of $49 million for the quarter, while analysts expected a loss of $160.1 million.
“We are comfortable with our position and our ability to remain a standalone streaming service,” co-CEO Chris McCarthy said in a phone call after the results were released. “You can count on us to be opportunistic and seek partnerships
It was the second consecutive quarterly profit for the streaming unit, which also benefited from a price increase for Paramount+ in August and a 6% drop in costs.
The company has been cutting costs ahead of its planned merger with Skydance Media (). The deal is expected to close in the first half of 2025, Paramount said.
Total costs fell nearly 2% in the September quarter, helping Paramount report adjusted earnings of 49 cents per share, compared to estimates of 24 cents.
