The stock of Paramount Global is up 6% after the entertainment company released second-quarter financial results that showed its streaming service turned a profit for the first time.
The New York City-based company reported earnings per share (EPS) of $0.54 U.S., which beat analyst forecasts of $0.12 U.S.
Revenue in the quarter totaled $6.81 billion U.S., which was below consensus forecasts of $7.21 billion U.S. Sales were down 11% from a year earlier as TV advertising and cable subscriptions declined.
The Paramount+ streaming service turned profitable for the first time during the quarter, posting a profit of $26 million U.S. after losing $424 million U.S. a year ago.
Analysts had anticipated a loss for the streaming platform of $265 million U.S. during Q2.
Management said that revenue generated from Paramount+ grew 46% year-over-year during the quarter due to strong subscriber growth and higher prices charged to customers.
Paramount also announced a one-time impairment charge of $6 billion U.S. associated with a decline in the value of its cable television networks.
The impairment charge was because the market value of Paramount Global’s traditional TV networks, which include CBS, MTV, BET and Nickelodeon, has fallen below their book value.
In issuing its Q2 results, Paramount Global said that it plans to cut 15% of its U.S. workforce, or about 2,000 jobs, as part of a broad cost reduction plan.
Executives with the company said the cost cuts are part of its preparations to merge with privately held Skydance Media, which it agreed to do in July of this year.
The job cuts will target the company’s marketing and communications department and employees who work in finance, legal and other support functions.
The merger agreement with Skydance Media includes a 45-day “go-shop period” in which Paramount’s board of directors can find another buyer if they want.
Prior to today (Aug. 9), the stock of Paramount Global had declined 35% over the last 12 months and was trading at $10.21 U.S. per share.
