Paramount Global (PARA) reported a profit in its streaming division for the first time on Thursday, while its linear TV business reported a sharper-than-expected slowdown as the company took a nearly $6 billion writedown on the value of its cable business.
In a conference call, the company also announced plans to lay off 15% of its U.S. workforce. The layoffs will take place “in the coming weeks and will be substantially completed by the end of the year,” management said.
The results come as Paramount prepares for its expected merger with Skydance Media, which is expected to close in the third quarter of 2025.
In the second quarter, Paramount reported operating income of $26 million for its direct-to-consumer (DTC) segment, an improvement of $450 million from the same period last year. The company reported a loss for the segment of $286 million in the first quarter.
“Our strong second quarter performance demonstrates that we are delivering on our strategic priorities,” co-CEOs George Cheeks, Chris McCarthy and Brian Robbins said in the release.
“We will continue to aggressively execute on our strategic plan which focuses on transforming streaming to accelerate profitability, streamlining our organization – including at least $500 million in annualized cost savings – and improving the balance sheet by increasing free cash flow and optimizing our asset mix.”
Shares were up about 5% in after-hours trading as investors digested the results. At the time of the report, Paramount shares were down about 30% this year.
Overall, the company reported adjusted earnings of $0.54 per share in the second quarter, higher than the $0.13 expected by analysts polled by Times Of Update and higher than the $0.10 Paramount reported in the same quarter last year.
Revenue was $6.81 billion, below consensus expectations of $7.24 billion and down 11% from $7.62 billion in the same period last year. Linear ad revenue declined double digits in the quarter, down 11% from a year earlier, compared with the 10% decline analysts had expected.
Linear advertising revenue rebounded 14% in the first quarter due to Super Bowl ad sales recordBut the second quarter highlighted the challenges traditional media companies have faced amid a greater trend toward cord-cutting.
Like rival Warner Bros. Discovery, the company recorded a $5.98 billion goodwill impairment charge related to its cable networks.
Paramount Chief Financial Officer Naveen Chopra said the charge comes after the company “evaluated relevant factors that could impact the fair value of our reporting units, including the estimated total market value of the company as indicated by the Skydance transactions and recent indicators in the linear subsidiary market.”
Despite profits in its streaming segment, Paramount+ lost $2.8 million in the quarter, to $68 million, “primarily reflecting the planned release of a hard drive…
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