Entertainment stocks slide with Paramount serving as anchor
KanawatTH
Entertainment-focused stocks were the laggards in the Communication Services sector Thursday after a heavily disappointing report from Paramount Global ((NASDAQ:PARA) -25.1%, (NASDAQ:PARAA) -23.2%) gave investors a depressing read-through on advertising-focused and streaming media names.
It was Paramount's worst intraday decline in well over a year, but the day wasn't shaping up well for studio rivals Walt Disney (NYSE:DIS), -3.4%; Warner Bros. Discovery (NASDAQ:WBD), -4.7%; or Fox: (FOX) -3.8%, (FOXA) -4%. NBCUniversal owner Comcast (CMCSA) was -1.5%.
Other entertainment stocks seemed caught up in the downdraft as well: Warner Music Group (WMG) -2.9%; Sirius XM (SIRI) -3.3%; Lions Gate Entertainment ((LGF.A) -2.6%, (LGF.B) -2.5%); Nexstar Media Group (NXST) -4.3%; Sinclair Broadcast Group (SBGI) -6.6%.
While Paramount reported a 39% increase in direct-to-consumer revenue, the unit's operating income fell amid higher costs to support the growth of Paramount+. And the company's TV ad revenue fell by double digits amid a weaker market, though affiliate and subscription revenue also slipped, hurt in part by foreign exchange.
Two peers were standouts for pulling off positive stock action Thursday. Columbia Pictures owner Sony (SONY), a diversified business, was up 0.1%. And Netflix (NFLX) escaped the downward pressure, up 0.7%.