Paramount shares fall as CEO lowers ad revenue forecast

Shares of Paramount Global fell about 7% Tuesday after CEO Robert Bakish lowered expectations for the company’s advertising sales during the fourth quarter.

“The current market is challenging and we’re in it every day,” Bakish said during the UBS Global TMT Conference in New York. “That challenge is both on the linear side and the digital side. We had looked for some improvement in some sectors, but we haven’t seen that.”

Bakish has warned in recent quarterly earnings calls that the worsening advertising market has been weighing on Paramount’s business. On Tuesday, he revised the company’s previous forecast to down “a bit below” the third quarter, rather than in-line with prior results.

The company sees fourth-quarter advertising revenue declining by a larger percentage than it did in the third quarter. Paramount’s ad revenue fell 2% in the third quarter.

In addition to its broadcast network and portfolio of cable-TV channels, Paramount’s streaming service Paramount+ has an ad-supported tier. The company also owns the free, ad-supported streamer Pluto, which Bakish said was also feeling the pain of the tough ad market.

Paramount isn’t the only media company to say the ad market is rough. NBCUniversal CEO Jeff Shell said at the UBS conference Monday that it has steadily worsened over the last six to nine months. Still, Shell said his company will still see fourth-quarter ad revenue up mid-single digits compared to last year, noting that Peacock and the runoff election campaign in Georgia gave NBCUniversal a boost.

Paramount’s Bakish is optimistic that current advertising trends will reverse, however.

“A challenging advertising market is cyclical,” Bakish noted. “We managed through a number of these cycles, as recently as the beginning of the decade. This too is a cycle and will turn. And when it does turn, you really see the power of the portfolio of assets we have.”

Programing note: Paramount CEO Robert Bakish will appear on CNBC’s “Squawk on the Street” on Wednesday at 10 a.m. ET.

Disclosure: Comcast is the parent company of NBCUniversal and CNBC.

Clarification: This story was updated to reflect that Paramount sees ad revenue declining by a greater percentage in the fourth quarter than it did in the third quarter.