Stock of Paramount Soars After Earnings Beat and Sale of Simon & Schuster

In the realm of post-market trading on Monday, Paramount Global's shares experienced a notable upswing, fueled by the media powerhouse's surpassing of expectations in its latest quarterly financial report.

‍

For the second quarter, the company reported a net loss of $299 million, corresponding to 48 cents per share, as opposed to the net income of $419 million, or 62 cents per share, recorded during the same period in the previous year.

‍

Paramount (PARA, +0.55%) achieved 10 cents in adjusted diluted earnings from continuing operations, in stark contrast to the 64 cents reported a year earlier. This performance differs from the expectations of analysts, who had projected a breakeven outcome based on adjusted earnings.

‍

Chief Executive Bob Bakish conveyed, "Throughout the second quarter, our unwavering focus was on scaling our streaming platforms, optimizing our traditional operations, and constructing a sustainable business framework that will propel the company toward substantial earnings growth by 2024." This statement was made during a presentation to shareholders.

‍

In the realm of extended trading on Monday, the shares of the media conglomerate demonstrated a noteworthy surge of 4.5%.

‍

Revenue witnessed a decline to $7.62 billion from $7.80 billion, whereas analysts had anticipated figures of $7.44 billion. Paramount's streaming service, Paramount+, experienced a notable 47% rise in revenue, while overall direct-to-consumer advertising revenue grew by 21%.

‍

Bakish further commented, "Even within the prevailing environment, our TV Media segment remained a significant contributor to earnings. As we gaze into the future, our approach will steadfastly revolve around prioritizing content and maximizing its value across platforms and revenue streams. Concurrently, we remain committed to navigating this peak year of streaming investment with the utmost efficiency."

‍

During the second quarter, the direct-to-consumer business reported an adjusted operating income before depreciation and amortization, resulting in a loss of $424 million.

‍

In a separate development, Paramount unveiled a significant announcement on Monday—KKR's intention to acquire its Simon & Schuster publishing business for an all-cash transaction amounting to $1.62 billion.

‍

Bakish commented on this move, stating, "The proceeds generated from this transaction will augment Paramount's financial flexibility and enhance our capacity to generate enduring value for our shareholders. Additionally, this action will contribute to the reduction of our debt burden, as stated in our official release."

‍