As TV advertising drops 11% and quarterly results miss Wall Street expectations, the company takes on $1.67 billion in programming costs and reduces its dividend.
As of the end of March, Paramount Global had 60 million Paramount+ streaming subscribers worldwide, up 4.1 million from nearly 56 million as of the end of 2022. The latest results, however, fell short of Wall Street’s expectations, and the Hollywood conglomerate reported a swing to a loss for the first quarter on Thursday. This was due to a wider loss in streaming as well as a decrease of 11% in TV advertising revenue.
The board likewise disclosed a profit cut, saving money in the midst of financial and different difficulties as the business pushes towards turning its streaming organizations beneficial. Pre-market trading saw a 14% decline in Paramount’s stock.
Pluto TV, an advertising-supported streaming service, saw an increase in its monthly active users (MAUs) from 78.5 million at the end of the fourth quarter to 80 million as of March 31. The total number of global streaming subscribers, which stood at over 77 million at the end of December, was not immediately disclosed by the company.
However, the streaming unit’s adjusted operating loss before depreciation and amortization increased to $511 million in the second quarter of 2022, up from $456 million in the first quarter of 2022, as a result of higher streaming investments. The primary factor, according to the business, was “higher costs to support growth of Paramount+.”
Due to its upcoming merger of Paramount+ with Showtime into a single U.S. streaming platform later this year, Paramount, led by CEO Bob Bakish, also took impairment charges of $1.67 billion in the first quarter. It had predicted earlier this year that the integration would result in a content impairment charge of $1.3 billion to $1.5 billion in the first quarter and annual expense savings of $700 million.
“We will zero in on driving business sector driving streaming development, while exploring this unique macroeconomic climate. And remember that the choices we make will set us up well for streaming profitability, significant earnings growth, and a return to positive cash flow,” Bakish told analysts on a morning call.