Paramount Global disappoints on weak ad market

STORY: A tough day for Paramount Global.

The company formerly known as Viacom CBS missed quarterly revenue estimates Thursday amid weak advertising in its TV business. It also cut its dividend about 80-percent.

One analyst tells Reuters the dividend cut was not encouraging but necessary.

Paramount’s stock lost a quarter of its value in late morning trading.

It had an operating loss on the quarter—dragged down by a $1.7 billion charge in connection with its plan to integrate Showtime into its Paramount+ streaming service and remove certain programming. In a conference call with investors, CEO Bob Bakish said the company is navigating a challenging and uncertain macroeconomic environment though he said it is seeing signs of stabilization in the ad market.

Paramount invested in original content to try to attract subscribers to its streaming platform but is competing with established players such as Netflix and Walt Disney’s Disney+. Subscriber growth topped expectations but fell substantially from the previous quarter.

Paramount—like its competitors—has another problem to worry about. Film and Television writers walked off the job this week demanding higher pay. The last writers’ strike—some 15 years ago—lasted for 100 days, threw Hollywood into disarray, and cost the California economy an estimated $2.1 billion.