posted lower earnings for the fourth quarter as losses mounted at its streaming business and higher film costs ate into profit.
The New York-based media company said Thursday that higher revenue from its direct-to-consumer and film segments offset declines in its core television business. Higher costs, though, weighed on profit, and results missed Wall Street expectations.
Shares fell more than 8% to $22.60 in premarket trading.
In streaming, the company ended the quarter with 56 million Paramount+ subscribers, topping analysts’ expectations of 53.9 million, according to FactSet. Direct-to-consumer revenue rose 30% to $1.40 billion, while costs climbed 25%, reflecting higher content costs and international expansion.
Streaming companies have been working to rein in costs in recent quarters, shifting focus away from the rapid growth that defined the early stages of the sector and instead giving priority to profit.
Overall revenue rose 2% to $8.13 billion, below Wall Street estimates of $8.17 billion, according to FactSet.
Quarterly profit tumbled to $21 million, or a penny a share, down from $2.06 billion, or $3.16 a share, in the same quarter a year earlier. The year-ago period included a roughly $1.8 billion gain on the sale of the company’s CBS Studio Center in Los Angeles. Adjusted earnings from continuing operations were 8 cents a share, missing analysts’ estimates of 24 cents a share.
Without addressing the outlook for the current year, Chief Executive
said that the company expects to increase earnings in 2024.
The film business posted revenue of $936 million, up 35% from a year before, boosted by releases of splashy movies such as horror film “Smile” and the continued success of “Top Gun: Maverick.” Costs in the segment climbed 22%.
In Paramount’s core TV business, revenue fell 7% to $5.88 billion, dragged lower by drooping advertising sales and affiliate revenue. Revenue from licensing also fell 11% as the company produced fewer shows for third parties. The company trimmed costs by 9% in the segment.
Write to Will Feuer at [email protected]
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