Paramount Global Earnings Forecast: Decline Expected Ahead

Paramount Global is set to report earnings soon, with a headline prediction of a $0.26 EPS down from $0.62 last year and a projected 7% revenue drop. Investors should brace for possible stock volatility resulting from its traditional TV business struggles and potential DTC growth.

Date: 02-05-2025

AI Rating: 4

Review of Paramount Global's Upcoming Earnings

Paramount Global (NASDAQ: PARA) is on track to announce its earnings around May 8, 2025. The report is expected to reveal a decline in revenue by approximately 7% year-over-year to $7.13 billion, along with earnings per share (EPS) estimated at $0.26, a significant drop from $0.62 per share from the previous year. These figures suggest strong headwinds for the traditional TV business, primarily due to declining advertising expenditures and a continued shift away from linear TV viewing.

Despite these challenges, there may be a silver lining. Analyst optimism surrounds the direct-to-consumer (DTC) segment, which if successful, could offset some losses from traditional TV. Paramount+ and Pluto TV may yield better subscriber growth and advertising revenues, thus exhibiting stronger performance relative to other segments. Maintaining engagement levels will be crucial for this strategy.

From a financial perspective, Paramount has reported a staggering net loss of approximately $6 billion over the last twelve months against a revenue generation of about $27.2 billion. Such a high loss-to-revenue ratio raises concerns about profit margins and overall financial health moving forward, which underscores the necessity for investors to exercise caution.

The stock's performance historically post-earnings reveals an imperfect outlook; of the last 19 earnings reports analyzed, only 47% resulted in positive one-day returns, a figure that dips to 45% when considering the most recent three years. For investors, these statistics suggest volatility surrounding the earnings announcement, influenced partly by peer stock performance in the same sector.

Overall, the challenges surrounding EPS and the revenue growth anticipated should be taken into account when evaluating future stock movements, with the market capitalization currently standing at $7.8 billion reflecting cautious investor sentiment. The landscape for Paramount is beset with uncertainty, and as they pivot towards DTC services, monitoring subscriber growth will be critical in assessing future price impacts.

Stocks: PARA