Paramount CEO warns on slowing ad market to impact Q4 earnings

Yahoo Finance entertainment reporter Allie Canal breaks down Paramount CEO Bob Bakish's recent comments on the ad market and how it will affect the company's fourth-quarter results.

Video Transcript

ALLIE CANAL: As Paramount Global shares sinking today, down as much as 6.9%, just shy of 7% there, after CEO Bob Bakish warned investors during a UBS conference that a weakening advertising market will likely impact fourth quarter earnings results. The company previously guided that earnings would come in roughly in line with Q3. But conditions have not improved like expected.

And guys, it's not just advertising. It's also foreign exchange pressure, this decline in linear television that has consistently weighed on this company. Stock down, year to date, nearly 44%. And it seems like investors, they don't have the patience anymore. Bob Bakish, though, he's continuously preached that this is cyclical. This, too, shall pass. He really emphasized that Paramount is in a good position, that streaming losses will peak in 2023. But again, investors, they don't want to wait around for that.

DAVE BRIGGS: And Allie, it just feels sector wide, right? I mean, you read Brian Stelter in "The Atlantic," talking about the media winter is here. And you're talking about layoffs sector wide. It feels like a really tough next 6 to 12 months for the entire media environment. But they did have a hit on their hands with "George and Tammy." Did you see that one? That, they say, was the most watched Showtime hit they've come to date, but they didn't give singular solo Showtime numbers. Did you--

ALLIE CANAL: I--

DAVE BRIGGS: --ctach that?

ALLIE CANAL: --have not watched "George and Tammy"--

DAVE BRIGGS: George Jones and Tammy Wynette for those that don't follow country music.

ALLIE CANAL: They do have good content, though. I mean, Wall Street is pretty confident in the content. That's the bullish side. The negative side, though, is those accelerating losses. And Bob Bakish did say that streaming price increases are going to come. He did not provide a timeline, but said that's on the horizon. So it's just a wait and see game for all of these media giants.

DAVE BRIGGS: Yes, wait and see for that Showtime app, too, because he wouldn't commit to it standing alone in the future going forward.