© Reuters. Analysts Note a ‘Tough’ Quarter for Paramount (PARA), Shares Down 9%
By Senad Karaahmetovic
Paramount (NASDAQ:) shares are trading nearly 9% lower on Wednesday after analysts said the company experienced a “tough” quarter.
an EPS of $0.39 on revenue of $6.92 billion, missing the consensus of $0.45 on sales of $7.1 billion. Direct-to-consumer revenue was $1.23 billion, below the $1.26 billion estimate.
Paramount said it had 66.5 million global streaming subs at the end of Q3. Paramount+ subs were 46 million. Shares were especially hit by the fact the company had a $333 million cash outflow.
Wells Farago analysts said the negative cash flow will “certainly get investor attention.”
“This is a tough quarter for PARA as linear pressures appear to be worsening while DTC revenue growth is slowing. Expenses are running hot, both P&L and cash, with earnings significantly down y/y,” they wrote in a client note.
Goldman Sachs analysts reiterated a Sell rating on PARA shares after earnings.
“We expect a neutral reaction in the stock, reflecting solid financial performance and Paramount+ net adds, potentially tempered by investor concerns that key drivers of profitability in the TV Media segment (subscription and advertising revenues) could see greater pressures as cord-cutting accelerates and the economic backdrop becomes more difficult,” the analysts told clients.
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