Paramount To Report Q3 Results As SkyDance Merger Looms, Retail Shrugs Off Stock Woes

Media and entertainment company Paramount Global, Inc. ($PARA) ($PARAA) is scheduled to report its third-quarter results ahead of the market open on Friday.

Paramount has concluded a merger agreement with Skydance Media, founded by Oracle founder Larry Ellison’s son David Ellison. The transaction is expected to close in the first quarter of 2025, contingent on regulatory approvals and other customary closing conditions.

The merger was approved by the Paramount board upon unanimous recommendation by a Special Committee appointed to vet the deal and by Shari Redstone-run National Amusements, Inc., which is a majority owner of Paramount’s Class A stock. SkyDance will merge with Paramount. The new Paramount will be led by David Ellison, and have an enterprise value of $28 billion. 

SkyDance has agreed to invest up to $6 billion into Paramount.  

Analysts, on average, expect Paramount to report adjusted earnings per share (EPS) from continuing operations of $0.24 and revenue of $6.94 billion. The company has fallen short of revenue expectations in each of the past three quarters.

In the year-ago quarter, the two metrics came in at $0.30 and $7.13 billion, respectively. 

Adjusted operating income before depreciation and amortization (OIBDA) was at $867 million in the preceding quarter. 

Paramount’s direct-to-consumer business is expected to rake in a loss of $161.5 million, Yahoo Finance reported, citing Bloomberg estimates. In the second quarter, Paramount+ subscriber fell 2.8 million, primarily due to the planned exit from a hard bundle agreement in South Korea.  However, its average revenue per user (ARPU) rose 26%.

Retailers are largely bullish on the stock. On Stocktwits, a user said, barring a post-earnings sell-off or merger uncertainties, the stock could rally on a short squeeze.

Paramount Class B shares have lost about 21% for the year-to-date period.

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