Paramount’s fourth quarter earnings are nothing to smile about

According to the company, Paramount Global ended 2022 with more than 77 million streaming subscribers; nearly 56 million of those came from Paramount+. That means the main streamer added 9.9 million subscribers in the last quarter of the year, a record.

Unfortunately, total operating income plunged 93 percent in the fourth quarter to just $182 million (from $2.664 billion in the fourth quarter of 2021). Wall Street forecasts the company will report fourth-quarter earnings of 24 cents per share on revenue of $8.16 billion. Paramount posted adjusted earnings of 8 cents per share on revenue of $8.131 billion, missing both benchmarks. Without these adjustments, Paramount Global became unprofitable.

Streaming revenue grew by 30 percent, while spending grew by 25 percent. The trajectory of films was similar, but more favorable: revenues increased by 35 percent, while expenditures increased by 22 percent. Both revenues and expenses decreased by single digits in linear television, where advertising sales decreased most significantly.

Connected

Connected

Paramount Pictures released “Smile” and “Babylon” in the fourth quarter. “Smile” left the executives smiling; box-office bomb “Babylon” is definitely not. “Top Gun: Maverick” helped bring home entertainment.

On the series side, the trailer for “Yellowstone” “1923” starring Harrison Ford and Helen Mirren premiered in December; another Taylor Sheridan series, “Tulsa King” starring Sylvester Stallone, debuted in November.

FAST service Pluto TV grew by 6.5 million monthly active users (MAUs) worldwide in the quarter, reaching nearly 79 million.

Shares of Paramount Global ( PARA ) are currently down 7 percent in premarket trading.

“Paramount continues to demonstrate the success of its global multi-platform strategy with popular content at its core,” Paramount Global chief Bob Bakish said in a statement accompanying the earnings. “Nowhere was this more evident than in the growth of Paramount+, which added a record 9.9 million subscribers in the fourth quarter, driven by hit content such as ‘Top Gun: Maverick,’ ‘1923’ and ‘Criminal Minds: Evolution.’

“Additionally, in 2022, Paramount Pictures delivered 6 No. 1 films at the U.S. box office, and Paramount regained its position as the most-watched media family in linear television,” he continued. “Our content and platform strategy is working, and with more exceptional content this year, we expect to restore the company’s revenue growth in 2024.”

Bakish and his senior management team will host a conference call at 8:30 a.m. ET to discuss the quarter in more detail.

Brian Douglas / Paramount+

Late last month, Paramount brought together Paramount+ and Showtime (more). Sometime “later this year,” the company said, the Showtime linear television channel will be rebranded as “Paramount+ with Showtime.” The existing ad-free Paramount+ “Premium” tier without Showtime ($9.99/month) will be discontinued; the version with Showtime ($14.99/month) will also be known as Paramount+ with Showtime.

The combination of brands means that certain Paramount+ originals will air on Showtime’s linear channel. It’s also the penultimate step toward Showtime’s complete folding into Paramount+, which would mark the end of the linear channel. The two previously teamed up through a Showtime slot within Paramount+.

This also means layoffs that have already begun. On Monday, Chris McCarthy merged his newly acquired Showtime staff with MTV Entertainment Studios. He elevated Nina L. Diaz to chief creative office and president of content and (basically) showed Showtime co-chairs Gary Levine and Jana Winograde the door.

Register: Stay up to date with the latest movie and TV news! Subscribe to our email newsletter here.