Shares of Paramount Global (PARA, PARAA) fell as the company reported mixed fourth quarter earnings. While adjusted EPS beat, revenue missed estimates. Bloomberg Intelligence senior media analyst Geetha Ranganathan joins Yahoo Finance to discuss investor outlook amid M&A chatter.

While "fundamentals do matter," Ranganathan explains investors are focused on Paramount's potential "exit options." Warner Bros. Discovery (WBD) reportedly discussed a merger, which "makes sense" given Paramount's heavy exposure to television networks. However, Ranganathan notes a deal would have been a "financial death sentence" given both companies' heavy debt.

Ranganathan says the "biggest question" is whether streaming gains can offset linear TV declines at the company. While Paramount+ profitability is forecasted by 2025, Ranganathan questions if it's "enough" to keep investors engaged.

For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.

Editor's note: This article was written by Angel Smith

Video Transcript

JULIE HYMAN: Shares of Paramount little changed on the heels of its mixed earnings report. The company reporting a better-than-expected profit of $0.04 per share, but revenue did miss estimates. It was down 6% year-over-year. Let's bring in Gita Raghunathan, Bloomberg Intelligence Senior Media Analyst. Good to see you. I know we're looking through the earnings here, but let me just get the elephant out of the way ahead of time, Geetha. At this point, is all investors care about sale news from this company? Or are they still paying attention to these earnings?

GEETHA RANGANATHAN: I mean, fundamentals do matter, Julie, but obviously not as much for this company as those M&A rumors. And we've had plenty of those over the past few months. So at this point, I think investors kind of really trying to see what are the possible M&A exit options for this company. And those seem to be actually shrinking as each day passes.

JOSH LIPTON: Is there-- Geetha, when you think about potential acquirers, are there names that you think, yes, that could make strategic and financial sense?

GEETHA RANGANATHAN: So, you know, the big name obviously that came up maybe about two months ago was Warner Brothers Discovery around Christmastime, kind of entertaining this thought of combining the two companies. And of course, it makes a lot of sense. They both have heavy exposure to TV networks. They could extract a whole lot of synergies. There's obviously a lot to be said there.

But then you look at it, I think investors really did not like the idea at all. It would have been a financial death sentence for both of these companies, because debt, debt is a huge problem actually at both of them. Paramount has over $16 billion. Warner Brothers Discovery has close to about $45 billion. Investors did not like the idea at all. And you know, yesterday actually got the news that Warner Brothers Discovery is kind of walking away from-- walking away from that, looking at that deal.