• Paramount Global’s revenue fell 11% in the second quarter, missing analysts’ expectations by the most since February 2020.
• Revenues fell as television license fees fell 48%, exacerbating declines in subscription fees and advertising revenues.
• Paramount’s streaming division posted a profit of $26 million.

Paramount Global’s second-quarter revenue fell 11%, missing analyst estimates, as licensing, television advertising and cable subscription revenue declined.

Still, revenue jumped as the company’s streaming division posted an unexpected profit – the first time Paramount has reported a profitable quarter for its direct-to-consumer business.

Here’s how Paramount performed during the quarter compared to Wall Street expectations, based on an analyst survey conducted by LSEG:

• Earnings per share: 54 cents adjusted compared to 12 cents expected
• Revenue: 6.81 billion US dollars compared to expected 7.21 billion US dollars

The revenue drop was the biggest miss against analyst estimates since February 2020, according to LSEG data. Paramount attributed the miss to a decline in television licensing revenue, which can be difficult for analysts to model given their start and end dates.

Paramount+ revenue rose 46% on year-over-year subscriber growth and higher prices. Paramount+ subscriber numbers fell 2.8 million from last quarter to 68 million as the company terminated a Korean partnership deal with entertainment company CJ ENM’s streaming platform Tving.

Paramount’s streaming division posted a profit of $26 million in the quarter, after losing $424 million a year earlier. Analysts had forecast a loss of $265 million for the quarter.

Paramount reiterated that it is on track to break even with Paramount+ in the US in 2025. The streaming service has raised prices and cut spending on content.

Paramount’s quarterly profit will be helped by the absence of an NFL licensing fee for this quarter, which is not due until later in the year.

Paramount shares have fallen 31 percent so far this year due to declining cable subscriber numbers and a weakening advertising market for linear television.

The company agreed to a merger with Skydance Media last month. The deal includes a 45-day trial period during which a special committee of the Paramount board can find another buyer, which ends later this month.

Paramount has identified $500 million in cost savings, including workforce reductions. These savings are part of the $2 billion in synergies associated with the transaction with Skydance.

Paramount also had to record a one-time impairment of $6 billion in connection with the decline in its cable networks. On Wednesday, competitor Warner Bros. Discovery had already taken a write-down of $9.1 billion.

Paramount had to accept the fee as a forced adjustment due to the transaction with Skydance.