[NEW YORK] Paramount Global, the parent of CBS and MTV, reported first-quarter results that beat analysts’ estimates, reflecting the improving performance of its Paramount+ streaming platform.
Revenue totalled US$7.19 billion, the New York-based media company said on Thursday (May 8), exceeding the US$7.10 billion Wall Street was estimating. Excluding some items, earnings amounted to 29 US cents a share, surpassing analysts’ estimates of 25 US cents.
The company, which has agreed to merge with the independent film and TV producer Skydance Media, managed to beat projections in a tough stretch marked by falling TV ad sales and shrinking pay-TV viewers. Both revenue and profit declined from a year ago, when the CBS network carried the Super Bowl. But the company’s direct-to-consumer unit, led by Paramount+, delivered a 9 per cent boost in sales and narrowed its loss.
“This success was driven by our differentiated content strategy of fewer, bigger, breakthrough original series, where we continue to see great momentum,” co-chief executive officer Chris McCarthy said on a call to discuss the results with analysts.
Paramount is embroiled in a lawsuit brought by US President Donald Trump and is awaiting regulatory approval for its merger with Skydance, led by David Ellison, the son of Silicon Valley billionaire Larry Ellison. Co-CEO Brian Robbins said the company remains “on track” to close the transaction in the first half of this year.
Against that backdrop, the company continued to expand its streaming service, adding 1.5 million customers to the Paramount+ service in the first quarter and beating analysts’ estimate of 1.41 million. The platform, which airs shows such as Landman and Tulsa King, has a total of 79 million subscribers.
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Chief financial officer Naveen Chopra said the company expects that during the second quarter, “subscribers will decline given the combination of content seasonality and the termination of an international hard bundle partnership”.
In traditional TV, Paramount’s advertising revenue declined to US$2.04 billion in the first three months of the year, down 21 per cent from a year earlier, while its subscriber and affiliate revenue slumped 9 per cent.
Last year’s coverage of the Super Bowl on CBS delivered a huge gain in advertising sales, making the comparisons tough. Excluding that event, Paramount’s total revenue grew 2 per cent, the company said.
In filmed entertainment division, Paramount reported revenue of US$627 million, up 4 per cent, with Robbins stating that “the performance of the segment in Q1 was strong thanks to the major theatrical success of Sonic the Hedgehog 3”.
Trump’s recently announced plans to slap tariffs of 100 per cent on movies made outside the US is expected to have a major impact on the overall film industry, though the details remain unclear.
“The macro environment is uniquely dynamic right now and that does create some uncertainty, which has the potential to impact revenue primarily in advertising,” Chopra said.
Earlier Thursday, Warner Bros. Discovery, the parent of HBO and CNN, reported disappointing first-quarter sales due to declines in traditional pay-TV subscriptions and a weaker movie slate. BLOOMBERG
