By Samrhitha A
(Reuters) -Paramount Global fell short of Wall Street estimates for quarterly revenue on Wednesday but posted a surprise profit as streaming gains helped overshadow a weak advertising market, sending its shares up nearly 2% after the bell.
The media industry has been grappling with a changing landscape of streaming gaining dominance over traditional television and the impact from Hollywood's strikes last year, with a soft advertising market adding to the pressure.
Companies have been benefiting from raising prices on their services and pushing ad-supported offerings, while also keeping content spend low.
The media conglomerate reported overall fourth-quarter revenue of $7.64 billion, missing analysts' estimate of $7.85 billion, according to LSEG data. It also posted a surprise profit of 4 cents per share, while analysts were expecting a loss of 1 cent.
"We now expect to reach domestic Paramount+ profitability in 2025," CEO Bob Bakish said.
Paramount+, the company's flagship streaming platform, added 4.1 million subscribers during the quarter, compared with 2.7 million in the previous quarter. The figure was slightly above the estimate of 4.03 million new subscribers, according to data from Visible Alpha.
The company has been pumping money into its fast-growing but unprofitable streaming unit Paramount+, saying in November the investments had peaked a year ahead of the target.
The results come when the U.S. entertainment industry is abuzz with fresh consolidation moves. Reuters reported in January, citing a source, that Skydance Media CEO David Ellison was exploring an all-cash bid to acquire entertainment company Paramount Global's parent, National Amusements.
Revenue at its TV media segment declined by 12% from a year earlier and advertising revenue fell by 15%, impacted by lower political advertising and the twin Hollywood strikes.
"We're seeing some signs of stabilization in the ad market," finance chief Naveen Chopra said, adding that the company expects to report "low to mid-teens advertising growth" in the first quarter.