On August 8, 2024, Paramount Global (PARA, Financial) released its 8-K filing for the second quarter of 2024. Paramount Global operates in three global business segments: TV media, filmed entertainment, and direct to consumer. The TV media business includes television production studios and various broadcast and cable networks, including CBS, 15 owned CBS affiliates, Paramount, Nickelodeon, MTV, BET, and VH1. Filmed entertainment consists of multiple film studios, most importantly Paramount Pictures. The film studios produce and distribute movies that they license to movie theaters and other media outlets. Direct to consumer includes multiple streaming platforms, including Paramount+, which now includes Showtime, Pluto TV, and BET+. Much of the content on Paramount's streaming platforms is created by the production studios housed within the firm's other two business segments.
Performance Overview
Paramount Global reported a mixed performance for Q2 2024. The company posted a diluted EPS from continuing operations of $(8.12), significantly missing the analyst estimate of $0.10. However, the adjusted diluted EPS from continuing operations was $0.54, which exceeded expectations. Revenue for the quarter came in at $6,813 million, falling short of the estimated $7,211.29 million.
Segment Analysis
Direct-to-Consumer: This segment showed robust growth, with revenue increasing 13% year-over-year to $1,880 million. Paramount+ revenue grew 46%, driven by subscriber growth and ARPU expansion. Adjusted OIBDA for the segment improved by $450 million year-over-year to $26 million.
TV Media: Revenue decreased 17% to $4,271 million, primarily due to declines in licensing revenues. Advertising revenue fell 11%, and affiliate and subscription revenue decreased by 5%. Adjusted OIBDA for the segment decreased by 15% to $1,018 million.
Filmed Entertainment: Revenue decreased 18% to $679 million, largely due to the timing of releases. Theatrical revenues fell 40%, and licensing and other revenue decreased by 9%. Adjusted OIBDA for the segment decreased by $59 million year-over-year.
Financial Highlights
Paramount Global's financial achievements include a significant improvement in adjusted OIBDA, which increased by 43% year-over-year to $867 million. The company also reported $500 million in annualized cost savings as part of its strategic plan.
Income Statement
| Three Months Ended June 30 | 2024 | 2023 | B/(W)% |
|---|---|---|---|
| Revenue | $6,813 million | $7,616 million | (11)% |
| Operating Loss | $(5,318) million | $(250) million | n/m |
| Diluted EPS from Continuing Operations | $(8.12) | $(0.59) | n/m |
| Adjusted OIBDA | $867 million | $606 million | 43% |
Balance Sheet
As of June 30, 2024, Paramount Global reported total assets of $45,890 million, down from $53,543 million at the end of 2023. The decrease was primarily due to a goodwill impairment charge of $5.98 billion. Total liabilities stood at $27,944 million, while stockholders' equity was $16,946 million.
Cash Flow Statement
Net cash flow provided by operating activities from continuing operations was $319 million for the first six months of 2024, compared to $(624) million in the same period last year. Free cash flow for the same period was $219 million, up from $(764) million in the first half of 2023.
Commentary
"Our strong performance in Q2 demonstrates that we are delivering on our strategic priorities. We are proud of our results, including significant earnings growth largely driven by our DTC segment. In fact, for the fourth year in a row, Paramount+ is leading the industry in domestic sign-ups driven by our big broad hit TV series and blockbuster films." - George Cheeks, Chris McCarthy & Brian Robbins, Co-CEOs
Analysis
Paramount Global's Q2 2024 earnings report highlights both achievements and challenges. The company's direct-to-consumer segment showed strong growth, driven by Paramount+. However, declines in the TV media and filmed entertainment segments indicate ongoing challenges in traditional media and theatrical releases. The significant goodwill impairment charge also impacted the overall financial performance.
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Explore the complete 8-K earnings release (here) from Paramount Global for further details.
