Paramount Global's revenue falls short of expectations as traditional pay TV subscriptions decline.

• Since February 2020, Paramount Global's revenue dropped 11% in the second quarter, which was the company's biggest miss relative to analyst estimates.
• TV licensing fees dropped 48%, resulting in a decline in revenue, which was further compounded by decreases in subscription fees and advertising sales.
• Paramount's streaming division swung to a profit of $26 million.

Despite analyst estimates, the company's second-quarter revenue dropped 11% due to declines in licensing, TV advertising, and cable subscription sales.

For the first time, Paramount's direct-to-consumer business has reported a profitable quarter, with earnings surging due to the success of its streaming division.

Based on a survey of analysts by LSEG, how did Paramount perform in the quarter compared to Wall Street's expectations?

• Earnings per share: 54 cents adjusted vs. 12 cents expected
• Revenue: $6.81 billion vs. $7.21 billion expected

Since February 2020, the revenue drop was the largest miss compared to analyst estimates, according to LSEG data. Paramount attributed the miss to a drop in TV licensing revenue, which can be challenging for analysts to model due to its start and end dates.

The number of Paramount+ customers decreased by 2.8 million from the previous quarter, resulting in a total of 68 million subscribers. Despite this, the company's revenue grew by 46% due to increased subscriber growth and higher prices.

Paramount's streaming division recorded a profit of $26 million in the quarter, surpassing analysts' expectations of a $265 million loss.

Paramount+ is expected to achieve U.S. profitability by 2025, despite raising prices and reducing content spending.

The absence of an NFL licensing fee for the quarter aids Paramount in achieving higher quarterly profits.

This year, cable subscribers and a weak linear TV advertising market have caused Paramount shares to drop 31%.

Last month, Paramount agreed to a merger with Skydance Media, which includes a 45-day go-shop period that ends later this month.

Skydance's acquisition by Paramount has resulted in the identification of $500 million in cost savings, which will include staff cuts, as part of $2 billion in synergies.

On Wednesday, Paramount announced a $9.1 billion write-down, followed by a $6 billion one-time impairment charge related to the decline in its cable networks.

As a result of its transaction with Skydance, Paramount had to assume the responsibility.