April 29, 2024, Paramount Studios, Los Angeles.
Eric Thayer | Bloomberg | Getty Images
Paramount Worldwide The company is cutting 15% of its U.S. workforce, or about 2,000 jobs, as part of a broader cost-cutting plan as it prepares to merge with Skydance Media.
Paramount has identified $500 million in cost savings, including job losses, as part of $2 billion in synergies associated with the Skydance deal. The layoffs, which will begin in the coming weeks and largely conclude by the end of the year, will target the company’s marketing and communications divisions as well as employees working in finance, legal, technology and other support functions, the company said on an earnings call Thursday. .
Paramount agrees to merge with Skydance Media last month. The deal, which includes a 45-day exploratory period during which a special committee of Paramount’s board of directors can find another buyer, is set to close later this month.
Meanwhile, earnings jumped as the company’s streaming division unexpectedly turned a profit – the first time Paramount has announced quarterly profits for its direct-to-consumer business.
The stock rose more than 5% in after-hours trading Thursday.
Here’s how Paramount performed for the quarter compared to Wall Street expectations, according to a survey of analysts by LSEG:
- Earnings per share: Adjusted 54 cents, expected 12 cents
- income: US$6.81 billion vs. US$7.21 billion expected
revenue decline
Second-quarter revenue fell 11%, missing analysts’ expectations, due to lower licensing, TV advertising and cable subscription sales.
The revenue decline compared with analysts’ expectations was the largest since February 2020, according to LSEG. Paramount attributed the miss to a decline in TV licensing revenue, which may be difficult for analysts to model given their start and end dates.
Paramount+ revenue increased 46% due to year-over-year subscriber growth and price increases. Paramount+ customer base fell 2.8 million from the previous quarter to 68 million as the company Termination of Korea Cooperation Agreement Partnered with entertainment company CJ ENM’s Tving streaming platform.
Paramount’s streaming division lost $424 million last year and made a profit of $26 million this quarter. Analysts expected a loss of $265 million for the quarter.
Paramount reiterated that Paramount+ expects to be profitable in the United States by 2025. increase price and cut back on content spending.
Paramount’s quarterly profit benefited from the absence of NFL licensing fees during the period, which will take effect later this year.
The company’s shares have fallen 31% so far this year as cable TV subscriber numbers decline and the linear TV advertising market softens.
Paramount also took a $6 billion one-time impairment charge related to the decline of its cable network. it follows $9.1 billion writedown from peers Warner Bros. Discovery Wednesday.
The company had to view the fee as an adjustment forced by the Skydance deal.
