- Quarterly results for Paramount Global (PARA) came in below expectations, and the entertainment company announced that it would cut its quarterly dividend.
- Although sales jumped at its direct-to-consumer unit, which includes the Paramount+ streaming service, expenses also moved higher.
- Paramount Global shares plummeted 28% on May 24, dropping the stock into negative territory for 2023.
Paramount Global (PARA) was the worst-performing stock in the S&P 500 after the media company missed profit and revenue estimates and cut its dividend.
The owner of CBS, Nickelodeon, Paramount Pictures, and several other entertainment properties reported earnings per share (EPS) of $0.09, an 85% drop from the year before and about half of what analysts expected. Sales fell 1% to $7.27 billion, $150 million below forecasts.
Revenue declined 8% at its traditional TV properties and was down 6% at its film studio division. Sales at the company's direct-to-consumer unit, which includes the Paramount+ streaming service, soared 39%. However, expenses jumped 31%, producing an overall loss of $511 million.
Paramount Global slashed its quarterly dividend to $0.05 from $0.24, the first time it's lowered the payment since 2009. CEO Bob Bakish said the decision will "further enhance our ability to deliver long-term value for our shareholders as we move toward streaming profitability." The company indicated that it expects the cut will result in half a billion dollars in annualized savings.
Shares of Paramount Global plunged 28% on May 4, putting them in negative territory for the year.