Paramount Global Revenue Up, EPS Down

Paramount Global (NASDAQ:PARA), a media company known for its diverse entertainment content, released its earnings for the fourth quarter of 2024 on Feb. 26, 2025. The results spotlight the company’s ongoing struggle to meet financial objectives despite notable progress in its streaming services. For the quarter, diluted earnings per share (EPS) significantly underperformed, reporting at -$0.11 in comparison to an analyst forecast of $0.13, coming up short by $0.24, marking a 184.6% miss. Total revenue was $7.98 billion, shy of the $8.10 billion target but showed a 5% improvement from the previous year's $7.64 billion. While streaming successes such as Paramount+ reflect positive momentum, challenges in traditional media continue to be a hurdle.

Source: Analyst estimates for the quarter provided by FactSet.

Business Overview and Recent Focus Areas

Paramount Global operates as a major entity in the media and entertainment industry, known for its extensive content library and a range of television networks, including CBS and Showtime. With a strategy increasingly focused on streaming, Paramount Global aims to capture market share in the shifting entertainment landscape. Recent efforts have been centered around expanding its direct-to-consumer segment with services like Paramount+ and Pluto TV. Key success factors include subscriber growth, content expansion, and strategic integrations.

The company has placed significant emphasis on enhancing its streaming portfolio by integrating Showtime content into Paramount+. This move supports its aim to solidify market competitiveness and growth in the direct-to-consumer operations, which posted a notable $204 million increase in adjusted OIBDA during Q4 alone. Paramount+'s rise in subscribers corresponds with this shift, positioning the company to compete robustly with other major streaming giants.

Quarterly Performance and Strategic Moves

Over the past quarter, Paramount Global achieved considerable expansion in its streaming services. Paramount+ led the way with a 16% increase in Q4 revenues and a year-long 33% surge, culminating in a subscriber base of 77.5 million by the end of the quarter. This subscriber growth signifies the company’s strong streaming momentum, essential given the ongoing digital transformation of content consumption.

The company's filmed entertainment segment also saw significant achievements. Paramount Pictures reported a 67% jump in revenue, driven by successful releases like "Smile" and the continued prominence of franchises such as Sonic the Hedgehog. Additionally, global distribution efforts for Pluto TV reflected positive results.

Despite these highs, the company faced challenges within its traditional media and advertising arms. TV Media revenue fell by 4%, and advertising revenue dropped by 1%, underlining the difficulties in adapting to an industry increasingly reliant on digital platforms. Meanwhile, CBS maintained its leadership as the #1 broadcast network, showcasing the importance of strong content offerings like "Yellowstone."

Financially, Paramount Global's cost management strategies yielded $500 million in annual run-rate savings. However, free cash flow saw a substantial decline to $56 million, down from $443 million a year prior. The company's strategic transaction closures, such as the one finalized with Skydance, are poised to support operational resiliency and efficiency in the upcoming fiscal year.

Looking Ahead

Looking forward, Paramount Global's management has expressed optimism in achieving full-year domestic profitability for Paramount+ by 2025. Leveraging its successful content-driven approach, the company remains committed to further enhancing its streaming capabilities and international market reach.

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