Paramount global surprises with streaming growth despite missing revenue estimates

Paramount Global's quarterly revenue disappointed Wall Street on Wednesday, even after posting a profit boosted by streaming gains that overshadowed a sluggish advertising market.

The media conglomerate's shares surged nearly two per cent after the bell, reflecting investors' optimism amid the evolving landscape of the entertainment industry.

Streaming services have steadily gained dominance over traditional television, compounded by the aftermath of Hollywood's strikes last year and a subdued advertising market.

Paramount Global's revenue for the fourth quarter stood at $7.64 billion, falling short of analysts' estimates of $7.85 billion, as per a Reuters report.

Nonetheless, the company surprised analysts by reporting a profit of 4 cents per share, defying analysts' expectations of a 1 cent loss.

CEO Bob Bakish expressed optimism about the future, stating, "We now expect to reach domestic Paramount+ profitability in 2025."

Paramount+, the company's flagship streaming platform, witnessed a notable spike in subscribers during the quarter, adding 4.1 million compared to the previous quarter's 2.7 million.

This growth surpassed expectations, with figures slightly above the estimated 4.03 million new subscribers, as reported by data from Visible Alpha.

Paramount Global's significant investments in Paramount+ have contributed to its expansion. The company previously announced in November that investments in the streaming unit had peaked, a year ahead of schedule.

Despite the challenges posed by a turbulent advertising market, Paramount Global remains focused on growth strategies.

Revenue from its TV media segment declined by 12 per cent year-over-year, while advertising revenue fell by 15 per cent, primarily impacted by reduced political advertising and the effects of Hollywood strikes.

However, the company's finance chief, Naveen Chopra, expressed cautious optimism, noting signs of stabilisation in the ad market.

Paramount Global anticipates reporting "low to mid-teens advertising growth" in the first quarter, indicating a potential rebound in advertising revenue.

The latest financial results from Paramount Global come amid ongoing consolidation efforts within the US entertainment industry.

In January, reports surfaced regarding Skydance Media CEO David Ellison's exploration of an all-cash bid to acquire Paramount Global's parent company, National Amusements.

(With inputs from Reuters)