SONY - Entertainment stocks slide with Paramount serving as anchor

2023-05-04 10:57:09 ET

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% .

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