Paramount Global stock plunged more than 25% on Thursday after the company announced a $1.1-billion loss for the first quarter.
The stock was also impacted by Paramount's announcement it was cutting its quarterly dividend to 5 cents a share from 24 cents a share to save cash.
The company said that as part of its plan to combine Paramount Plus with Showtime, it was taking a $1.7 billion charge for content that was removed from the services and from abandoned-development and contract-termination costs.
Paramount Plus added 4.1 million subscribers in the quarter, reaching the 60 million subscriber mark for the streaming service. But losses at the company’s direct-to-consumer unit rose to $511 million from $456 million a year ago, even as revenue rose 39% to $1.5 billion.
Subscription revenue for the direct-to-consumer unit rose 50% to $1.11 billion from $742 billion a year ago and ad revenue rose 15% to $398 million. Expenses rose 31% to $2.02 billion.
Pluto TV’s monthly average users rose to 80 million in the quarter.
Overall, Paramount reported a $1.1 billion billion loss, or $1.74 a share, in the quarter, compared to net income of $433 million, or 64 cents a share a year ago.
Adjusted operating income fell 40% to $548 million.
Revenues fell 1% to $7.3 billion,
The numbers were below Wall Street estimates.
At the company’s TV media unit, adjusted operating income before depreciation and amortization fell 15% to $1.3 billion.
Revenues fell 8% to $6.2 billion.
Advertising revenues fell 11% to $2.3 billion and affiliate revenue dipped 1% to $2.1 billion.
“Paramount continues to demonstrate the strength of its content engine, driving momentum across streaming, television and theatrical,“ CEO Bob Bakish said. “This resulted in Paramount Plus and Pluto TV reaching significant milestones with 60 million subscribers and 80 million MAUs, respectively, while CBS is poised to claim the No. 1 spot in broadcast for the 15th straight season.”
Bakish added: “Looking ahead, we are focused on continuing to drive market-leading streaming growth while navigating a dynamic macroeconomic environment. In addition, the updated dividend policy we have announced today will further enhance our ability to deliver long-term value for our shareholders as we move toward streaming profitability.”
