Analysts Eye Paramount Q2 Profit Increase, Streaming Sub Growth Decline – Media Play News
July 6, 2022
With studio quarterly financial results just a few weeks away, Paramount Global, the parent of Paramount Pictures and the Paramount + streaming platform, is pretty much on the financial bottom line, according to several Wall Street analysts.
With its old studio leading Hollywood in revenue through the middle of the year, largely due to the oversized performance of the ticket success Top Gun: Maverick, which generated $ 570.7 million in North American ticket sales and $ 1.11 billion worldwide, Paramount’s filmed entertainment segment sees a pre-tax profit in the second quarter (ending June 30) of around $ 903 million, according to Guggenheim analyst Michael Morris. That is up from an earlier forecast of 863 million dollars.
The estimate, if it holds up, marks a fantastic turnaround for Paramount, which realized an operating loss of $ 37 million in filmed entertainment in the first quarter, which ended March 31. The studio generated only $ 1 million in quarterly revenue during the pandemic when most movie theaters were closed.
Bank of America analyst Jessica Reif Ehrlich increased her pre-tax profit to $ 899 million, and competing studio results will help offset softer advertising revenues.
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Meanwhile, Wall Street seems prepared to deal with the projected direct-to-consumer streaming decline in Paramount and across the industry. Paramount CEO Bob Bakish has previously announced that he expects the company to see a decline of 3 million below in Q2 due to the ongoing conflict in Ukraine, and its impact on Eastern Europe.
Guggenheim’s Morris estimates Paramount will see 1.2 million net global subscribers (including Showtime OTT and Noggin) at 1.2 million, down from a previously estimated growth of 3.2 million subscribers. Paramount + could see a slight reduction in the previous estimate of 4.5 million net sub-additions to 4.1 million – largely due to the delayed link with Showtime OTT.
In any case, Morris claims that Paramount’s advertising revenue in the second quarter will be negatively impacted by the “incremental softness of the market” going forward. Reif Ehrlich believes that Paramount will generate 25% of its advertising revenue in the second quarter, while the industry’s uncertainty about a possible company sale remains.
“It does not seem to us that a sale is imminent [Paramount’s] streaming ambitions in the short term, “Reif Ehrlich wrote in a note.
Paramount Global reports accounting results for the second quarter on 4 August.