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Paramount Global's shares fell 25% after reporting lower-than-expected earnings and revenue. To increase long-term shareholder value, the company reduced its quarterly dividend to 5 cents per share from 24 cents, resulting in $500 million in annualized cash savings.
- In the quarter, Paramount Global's conventional TV earnings, comprising CBS and its affiliated cable networks such as MTV, Comedy Central, and Nickelodeon, declined by 8% to $5.2 billion. Meanwhile, the company's film production division experienced a 6% decrease in revenue compared to the previous year. Media corporations are facing difficulties in substituting conventional TV earnings, as customers cancel their subscriptions each quarter. Consequently, they are shifting their focus towards streaming revenue as they expand their direct-to-consumer operations.
Why it matters
Paramount Global plans to sell most of its ownership in BET later this year. The company's attempt to sell and merge Simon & Schuster publishing company last year was prevented by U.S. regulators. During the earnings call, CEO Bakish mentioned that Paramount has resumed the process of selling Simon & Schuster. On the call, Chief Financial Officer Naveen Chopra stated that the company aims to finalize a deal to sell the publisher before the end of the year.
