Paramount Global, the parent company of Network 10, has slashed its quarterly dividends by 79 per cent following a lower than expected Q1 earnings result.
The entertainment company cut its dividends to five cents per share from 24 cents a share in a move that will save it US $500 million a year.
The decision came after its Q1 results fell below analyst expectations. The quarterly revenue of US $7.27 billion was less than the US $7.42 billion expected, whilst earnings per share was 9 cents versus expectations of 17 cents.
CEO Bob Bakish said in a statement that the cuts would “further enhance our ability to deliver long-term value for our shareholders as we move toward streaming profitability.”
Shares fell by as much as 28 per cent on Thursday morning (US time) as the market responded to the weaker than expected first quarter results.
According to CNBC, this is the first time that Paramount has reduced its dividend since 2009.
Whilst revenue for the streaming services is on the up, the company was hit by costs and a reduction in traditional income sources such as cable and ad spend.
Subscriptions for Paramount+ rose by 4.1 million subscribers in the first quarter and revenue for the company’s streaming business lifted by 39 per cent. However the direct-to-consumer section has a loss of US $511 million up 12 per cent on the year before.
Paramount Global took a US $1.67 billion charge from the consolidation of Paramount+ and Showtime.
