Paramount Earnings: Progress Continues on Long Road

Paramount Global Class B, also helping to offset the decline of traditional television revenue. Despite this progress, streaming is still not profitable, leading to a decline in television profits. Excluding last year’s Super Bowl ad revenue, total revenue saw a 2% increase year over year.

It’s important to note that television media, which is responsible for most of Paramount’s profit, is declining rapidly. This makes it crucial for streaming to continue growing and become profitable. Paramount+ seems to be resonating with consumers, but there are still some red flags to consider.

In the last quarter, streaming revenue increased by 9% to $2 billion, with Paramount+ gaining 1.5 million new subscribers. Even with reduced ad revenue, the revenue per Paramount+ subscriber went up by 2.5%, showing a 30% increase over two years. Additionally, hours watched per user grew by 17% year over year.

However, there might be some challenges ahead in terms of financial progress. The company mentioned a soft streaming advertising market, which has impacted Pluto, Paramount’s free service. Management also anticipates a drop in subscribers next quarter as an international bundle comes to an end.

In conclusion, despite these obstacles, we are maintaining a fair value estimate of $20. The decline in the traditional television business means Paramount no longer has a competitive advantage. However, with its strong studios and television properties, the company is well positioned to adapt to the changing landscape of media.

Looking at the bigger picture, excluding Super Bowl profits, adjusted EBITDA for the first quarter decreased by $300 million, indicating a 30% decline to $688 million. While TV media’s adjusted EBITDA took a hit due to Super Bowl advertising, filmed entertainment saw an increase in adjusted EBITDA. The streaming sector also saw a reduction in losses, showing signs of improvement over the previous year.