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Paramount Global (NASDAQ: $PARA)

Paramount Global (NASDAQ: $PARA) is a global company in the fields of media, streaming, and entertainment, dedicated to creating content for a worldwide audience. The company’s operations are divided into three main segments: TV Media, Direct-to-Consumer, and Filmed Entertainment.

The TV Media segment encompasses both domestic and international broadcast networks and owned television stations, extensions of cable networks within the United States and globally, television studio operations on a domestic and international scale, and the production and distribution of first-run syndicated programming.

The Direct-to-Consumer segment focuses on a diverse portfolio of both domestic and international pay and free streaming services.

In the Filmed Entertainment segment, Paramount Global is engaged in the production and acquisition of various content, including films, series, and short-form media. This content is distributed and licensed across global media platforms, such as theaters, streaming services, television, and digital home entertainment, including digital versatile discs (DVDs).

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Paramount Global Sees Q3 Profit Rise

Paramount Global witnessed a notable surge in third-quarter profits, primarily attributed to increased revenue from its streaming and film divisions, even as its largest sector, linear TV, grappled with stagnant distribution income and a decline in advertising revenue.

The New York-based company, which owns CBS, the Paramount movie studio, and the Nickelodeon cable network, reported a 3% growth in revenue for the period.

This growth was driven by a substantial 38% rise in its streaming business and a 14% upturn in its film division, benefiting from recent releases within the “Mission Impossible” and “Teenage Mutant Ninja Turtles” franchises.

However, overall revenue saw an 8% decline, partly due to distribution fees that remained nearly unchanged from the previous year and a 14% drop in traditional video advertising.

In a statement, Paramount CEO Bob Bakish emphasized the company’s commitment to streaming. He stated, “We continue to execute our strategy and prioritize prudent investment in streaming while maximizing the earnings of our traditional business,” noting narrower losses at Paramount+ and a growth in new subscribers.

Bakish also added that the company expects direct-to-consumer (DTC) losses in 2023 to be lower than in 2022, signifying that streaming investment reached its peak ahead of the plan. Looking forward, Bakish expressed confidence in achieving substantial overall company earnings growth in 2024.

During an investor call, Paramount executives underscored their initiatives to bolster streaming activities and assured shareholders that the investment in streaming would be reduced in 2024 compared to 2023.

Paramount Cuts Streaming Losses to $238M as Subscribers Grow to 63M

In its efforts to streamline its asset portfolio and bolster its core entertainment endeavors, Paramount Global achieved a milestone of 63 million global streaming subscribers in the most recent quarter, an increase from 61 million at the end of June.

Additionally, the company made strides in reducing losses within its direct-to-consumer segment, narrowing them down to $238 million, a development that is potentially encouraging for Wall Street.

Led by Bob Bakish, Paramount Global is home to a diverse array of content, including Paramount Studios, CBS, Showtime, MTV, Comedy Central, BET, and Nickelodeon. The company has grappled with the perception that it might be too small to compete effectively in the streaming landscape against industry giants like Netflix, boasting 247 million subscribers, and Disney+ with 105 million core subscribers.

For the third quarter, Paramount reported $621 million in operating income, representing a 10 percent increase from the same period in the previous year.

Notably, the company also disclosed “nearly $60 million of strike-related idle costs” incurred during its latest quarter due to labor strikes by the Writers Guild of America and SAG-AFTRA, as explained by CFO Naveen Chopra. These expenses were deemed as incremental costs associated with maintaining production capabilities while the strikes were ongoing.

What is the Dividend Growth Rate for Para Stock?

Over the previous 12 months, Paramount Global (PARA) has recorded an average dividend payment per share that reflects a decrease of -19.79%. Looking back over the past 36 months, there was a decline of -5.07%. 

Is Para a Buy or Sell?

Paramount Global stock has garnered a consensus “buy” rating, which is the result of 30 buy ratings, 14 hold ratings, and 29 sell ratings, contributing to the average rating score.

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