Investing.com -- Paramount Global reported an unexpected second-quarter profit as its investment in streaming content continued to attract new subscribers and growth.
Paramount (NASDAQ:PARA) was up nearly 2% in premarket Tuesday trade following the report.
The media and entertainment reported Q2 adjusted EPS of $0.10 on revenue of $7.62 billion, topping estimates for a loss of $0.02 on revenue of $7.45B.
"In Q2, strong revenue growth was driven by subscriber growth and improvements in engagement and monetization. DTC remains on track to drive significant earnings improvement in 2024," the company said.
Subscription revenue grew 47% to over $1.2B, driven by subscriber growth on Paramount+, which added 0.7 million subscribers in the quarter reaching 61M in total.
Global viewing hours on Paramount+ and Pluto TV were up 35% year-over-year. The momentum in its streaming platform saw advertising revenue rise 21%.
Paramount also said it was selling Simon & Schuster to KKR & Co (NYSE:KKR) for $1.62B in an all-cash deal.
JPMorgan analysts hiked the price target by $1 to $17 per share on the Underweight-rated PARA stock.
"While we like PARA’s cost-cutting efforts, focus on DTC profitability, and decision to improve the balance sheet, we remain Underweight," the analysts said, citing linear subscriber and ad weakness.
Wells Fargo analysts also lifted the price target by $1 while remaining Underweight-rated.
"PARA put up a strong execution quarter, but derating risks outweigh better ests. With its higher multiple, high leverage, Q4 net add risk, and less M&A appetite than bulls think we remain Underweight."
(Additional reporting by Senad Karaahmetovic)