Tom Ryan, CEO and President of Paramount Streaming, speaks in the course of the LG press conference ahead of the Consumer Electronics Show (CES) in Las Vegas, Nevada, on January 4, 2023.
Patrick T. Fallon | AFP | Getty Images
Paramount stock closed greater than 15% higher Friday, its best day since March 2020, a day after posting one other double-digit gain.
The stock was up 28.6% week-to-date, in line for its best week since April . 2020However, the stock remains to be down about 18% year-to-date, heading for its seventh negative 12 months in a row, its longest yearly losing streak.
The media giant released its third quarter earnings report after the closing bell Thursday, posting higher profit and revenue from a 12 months earlier.
Its streaming business, which incorporates Paramount+ and Pluto TV, also reported 38% growth in revenue and narrower losses. Paramount+ posted a complete of 63 million subscribers.
Wall Street analysts liked what they saw from Paramount’s report.
Bernstein Research analysts noted that the trends within the third quarter were strong, and if the corporate keeps them up, Paramount can expect more earnings growth.
Moffett Nathanson Research analysts echoed that sentiment while remaining cautiously optimistic.
“No matter how any future bundling deal does or doesn’t play out, Paramount+ is moving into
this age as a leaner and more efficient platform than we had anticipated,” they wrote.
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Paramount’s positive momentum
The corporate’s positive momentum comes on the heels of a successful sale of book publisher Simon & Schuster earlier this week for $1.62 billion. CNBC previously reported that Paramount’s controlling shareholder, Shari Redstone, is open to a merger or selling the corporate at the correct price – but market conditions have complicated possibilities for a transformative transaction.
Paramount did, nevertheless, report losses within the TV arena, with promoting revenue dipping 14%. Its TV assets include brands like MTV, Nickelodeon, CBS and Showtime. Licensing and other revenue also decreased 7%.
While the corporate took successful with $60 million in idle costs from Hollywood labor strikes, company executives said on the earnings call that they’re optimistic the corporate will bounce back with its upcoming slate. The corporate also doesn’t plan to institute a streaming password-sharing crackdown just like Netflix’s.
Paramount’s stock closed up 10% Thursday during a rally across the media sector, spurred by Roku’s strong third quarter earnings report. A rise in Roku users allows consumers more access points to streaming services like Paramount+. Roku’s stock soared 30% Thursday.
Other media stocks also jumped Friday, including Roku and Disney. Warner Bros Discovery – which reports earnings next week – also was higher Friday.
–CNBC’s Christopher Hayes contributed to this report.