Paramount Global (PARA Quick QuotePARA - Free Report) delivered adjusted earnings of 60 cents per share in first-quarter 2022, which beat the Zacks Consensus Estimate for earnings by 27.66% but declined 61% year over year.

Revenues of $7.32 billion missed the Zacks Consensus Estimate by 1.66% and decreased 1% year over year due to a decline in advertising and licensing revenues.

Adjusted OIBDA declined 44% from the year-ago quarter’s level to $913 million.

Selling, general and administrative expenses increased 13.9% year over year to $1.61 billion.

Revenues by Type

Advertising revenues of $2.86 billion declined 7.9% year over year. Affiliate revenues of $2.84 billion climbed 15.3% year over year, reflecting expanded distribution and higher reverse compensation.

Theatrical revenues totaled $131 million in the reported quarter compared with the year-ago quarter’s $1 million. Content-licensing revenues of $1.49 billion decreased 18.8% year over year.

Segment Details

ViacomCBS’ Direct-To-Consumer revenues increased 82% year over year to $1.08 billion. Direct-To-Consumer subscription revenues grew 95% year over year to $742 million, reflecting paid subscriber growth on Paramount+.

Global streaming subscribers rose to more than 62 million, adding 6.3 million total subscribers in the quarter. Subscriber additions were driven by Paramount+, which added 6.8 million subscribers in the first quarter, bringing Paramount+ total subscribers to almost 40 million.

Domestically, Paramount+ saw strong engagement and consumption from a variety of content, including Halo, 1883, Star Trek Picard, live events and the NFL. Internationally, Acapulco Shore was a top acquisition and engagement driver for the service.

Pluto TV’s global monthly active users (MAUs) increased to nearly 68 million. Pluto TV gained broad distribution on T-Mobile through T-Mobile Tuesdays, giving customers exclusive access to new content and original series.

It also launched over 102 new channels internationally, totaling more than 1,000 global channels.

Direct-To-Consumer advertising revenues increased 59% year over year to $347 million, reflecting growth from Pluto TV and Paramount+, driven by increased pricing and impressions on both services.

However, TV Media revenues decreased 6% year over year to $5.64 billion, which included an impact of 8 percentage points from the comparison to CBS’ broadcast of Super Bowl LV in the year-ago period, partially offset by higher licensing and affiliate revenues. Excluding the impact of the Super Bowl, TV Media revenues grew 2% year over year.

Paramount’s cable portfolio had the #1 share of viewing in every key demo. MTV Entertainment Group had the #1 cable series with Yellowstone and four of the top 10 series among 18-34 age group.

Nickelodeon was the #1 network and had nine of the top 10 shows among kids between the age of 2 and 11 years. Comedy Central was the #1 Cable Entertainment network among 18–34-year-olds.

TV Media’s adjusted OIBDA declined 13% from the year-ago quarter’s figure to $1.54 billion due to unfavorable comparison with the Super Bowl broadcast in the prior-year period, and higher costs in 2022 associated with more original programming.

Filmed Entertainment revenues decreased 27% year over year to $624 million due to lower licensing revenues, which came in at $491 million, down 42% year over year. Theatrical revenue increased $130 million year over year and included revenues from the first quarter releases of Scream, Jackass Forever and The Lost City while the prior-year period was impacted by the closure or reduced capacity of movie theaters in response to the coronavirus outbreak.

Balance Sheet

As of Mar 31, 2022, Paramount Global had cash and cash equivalents of $5.3 billion compared with $6.3 billion as of Dec 31, 2021.

Paramount Global’s committed $3.5 billion revolving credit facility remains undrawn.

Total debt as of Mar 31, 2022 was $16.8 billion, down from a total debt of $17.7 billion as of Dec 31, 2021.

Zacks Rank & Stocks to Consider

Paramount Global currently carries a Zacks Rank #4 (Sell).

The company’s shares have declined 1% in the year-to-date period compared with the Zacks Consumer Discretionary sector’s decline of 21.8%.

Some better-ranked stocks from the Zacks Consumer Discretionary sector are Vitru Limited and World Wrestling Entertainment , each sporting a Zacks Rank #1 (Strong Buy) and Funko (FNKO Quick QuoteFNKO - Free Report) carrying a Zacks Rank 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Vitru shares have risen 9.2% in the year-to-date period. Vitru Limited is set to announce first-quarter 2022 results on May 16.

World Wrestling Entertainment shares have increased 22% in the year-to-date period. World Wrestling Entertainment is set to announce first-quarter 2022 results on May 5.

Funko shares have declined 9.5% in the year-to-date period. Funko is set to announce first-quarter 2022 results on May 5.