Paramount Skydance said first-quarter pre-tax earnings rose, driven by streamlined operations following its merger and better outcomes in the streaming and studios segments, which helped counter weaker television revenue. Shares of the company increased 4% in after-hours trading.
Quarterly results and drivers
The company reported adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) of $1.16 billion for the first quarter, an increase of 59% compared with the prior year. Consolidated revenue edged up 2% to $7.35 billion. Management attributed part of the uplift in profitability to cost savings realized after the merger and an 11% rise in streaming revenue.
Paramount also highlighted subscriber growth at its streaming service. Paramount+ reached 79.6 million total subscribers in the first quarter, a figure the company said benefited from a content addition in January - the start of broadcasting Ultimate Fighting Championship events on the platform.
Outlook and near-term pressure
Despite the quarter’s profit gain, Paramount provided second-quarter revenue guidance below the consensus. The company expects total revenue for the second quarter to fall between $6.75 billion and $6.95 billion, which compares with estimates of $7.07 billion compiled by LSEG. Management cited the lack of tentpole films such as "Mission: Impossible -- The Final Reckoning" and the absence of NCAA Final Four basketball as contributors to the revenue shortfall versus expectations.
Paramount said subscriber trends at Paramount+ will be roughly flat on a sequential basis in the second quarter as it exits approximately 2 million international bundled users.
M&A context
The reported results are the first since Paramount announced a planned $110 billion agreement to acquire Warner Bros. Discovery, a deal aimed at expanding the combined company’s scale across film and television by accessing Warner’s extensive library of content.
Additional corporate reporting
Separately noted in company reporting was Warner Bros. Discovery Inc., which recorded an adjusted profit of $0.23 per share for the first quarter, versus analysts’ estimates of $0.15 per share.
This release contains management’s reported figures and guidance as stated by the company.