Parallel streaming giant Paramount stock falls 8% after CEO Bakish warns of weak advertising market

The PARA stock fell by more than 8% on Tuesday after CEO Bob Bakish warned of a weaker advertising market's impact on fourth quarter earnings.

Bakish said at the UBS conference in New York City, that the fourth quarter will be in line with Q 3 results, and that we do not see the fourth quarter coming in a bit below the third quarter.

As we navigated through this point, we had looked for some improvement in certain sectors. Bakish said that we haven't seen that. The ad slowdown has hurt the company's free ad-supported video streaming service, Pluto TV, while foreign exchange challenges have also pressured the company's bottom line, according to the executive.

Last month, the company had a weak third-quarter earnings that missed both the top and bottom lines. Advertising revenue fell 2% in the quarter, while profits fell because of greater investments in content, marketing and international expansion.

While challenging advertising is cyclical, Bakish struck an optimistic tone when it comes to the future. I've managed through a number of these cycles as recently as the beginning of the decade. This is a cycle. This will turn out to be the case. Despite macroeconomic concerns, Bakish doubled down on the future of Paramount, revealing that the company plans to spend $6 billion on streaming content in 2024, after spending $2 billion in 2021.

We are very comfortable with our investment plan because we love the performance of our content engine. Bakish said that it is seeing dividends in the performance of our platforms.

It really all starts and ends with content, Bakish said during Tuesday's conference that Paramount will announce more franchise-focused offerings in 2023.

After Q 3 the net addition was 4.6 million, the company has 46 million paying users. Bakish, who previously told Yahoo Finance that future price increases would go up, confirmed future price increases during the company's Q 3 earnings call, although no timeline was offered.

Wall Street is stuck in long-term concerns over streaming losses, which are expected to reach $1.8 billion in 2022 and increase further in 2023. The share price is down 44% since the beginning of the year.

We've always built this with the goal of real business and profitability in mind - we look to make headway on that in 2023," Bakish said on Tuesday. We knew from Day One that we needed to turn this into a business, and we focused on creating a business with TV media-like margins. Bakish said that we believe that our multi-platform asset portfolio is a real advantage.

We've only had 18 months running for a company, unlike some people who have run it for over a decade. It takes a little while, but we are very focused on streamlining profitability and building a financially compelling business here. We are very much tracking in that direction. Alexandra is a senior entertainment and media reporter at Yahoo Finance. Follow alliecanal 8193 on Twitter and email her at alexandra.canalyahoofinance.com.