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Paramount Global (NASDAQ:PARA)

This company has been moved to the archive! The financial data has not been updated since May 4, 2023.

Common-Size Income Statement

Paramount Global, common-size consolidated income statement

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12 months ended: Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018
Revenues 100.00 100.00 100.00 100.00 100.00
Operating costs and expenses -65.81 -62.07 -59.29 -61.93 -62.77
Gross profit 34.19% 37.93% 40.71% 38.07% 37.23%
Selling, general and administrative -23.32 -22.38 -21.04 -20.30 -15.27
Depreciation and amortization -1.34 -1.36 -1.70 -1.59 -1.54
Restructuring and other corporate matters -1.94 -0.35 -2.44 -2.79 -1.34
Net gain on dispositions 0.19 8.20 0.85 1.97 0.00
Operating income 7.77% 22.03% 16.37% 15.36% 19.07%
Interest expense -3.09 -3.45 -4.08 -3.46 -3.22
Interest income 0.36 0.19 0.24 0.24 0.39
Net gains (losses) from investments -0.03 0.16 0.81 0.41 0.00
Loss on extinguishment of debt -0.40 -0.45 -0.50 0.00 0.00
Pension and postretirement benefit costs -0.22 -0.15 -0.27 -0.38 -0.43
Foreign exchange losses -0.19 -0.09 -0.14 -0.06 -0.02
Pension settlement charge 0.00 -0.03 0.00 0.00 0.00
Other 0.00 0.01 0.01 -0.08 -0.02
Other items, net -0.41% -0.27% -0.40% -0.52% -0.48%
Earnings from continuing operations before income taxes and equity in loss of investee companies 4.20% 18.21% 12.45% 12.03% 15.77%
(Provision) benefit for income taxes -0.75 -2.26 -2.12 0.03 -1.88
Equity in loss of investee companies, net of tax -0.68 -0.32 -0.11 -0.19 -0.39
Net earnings from continuing operations 2.77% 15.63% 10.22% 11.87% 13.50%
Net earnings from discontinued operations, net of tax 1.26 0.57 0.46 0.14 0.00
Net earnings, Paramount and noncontrolling interests 4.03% 16.20% 10.68% 12.01% 13.50%
Net earnings attributable to noncontrolling interests -0.36 -0.31 -1.10 -0.11 0.00
Net earnings attributable to Paramount 3.66% 15.89% 9.58% 11.89% 13.50%
Preferred stock dividends -0.19 -0.15 0.00 0.00 0.00
Net earnings attributable to Paramount common stock 3.47% 15.74% 9.58% 11.89% 13.50%

Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).

An analysis of the common-size income statement reveals a significant deterioration in overall profitability from 2018 to 2022. While the company maintained relatively stable margins in the early part of the period, 2022 experienced a sharp contraction in both operating and net margins, driven by rising costs and the absence of one-time gains.

Gross Profitability and Direct Costs
Gross profit margins exhibited a peaked trajectory, rising from 37.23% in 2018 to a maximum of 40.71% in 2020, before declining to 34.19% by 2022. This decline corresponds with a steady increase in operating costs and expenses, which reached their highest level of 65.81% of revenues in 2022.
Operating Expense Trends
A consistent upward trend is observed in selling, general, and administrative (SG&A) expenses, which climbed from 15.27% of revenues in 2018 to 23.32% in 2022. This represents a significant erosion of the operating margin, indicating that overhead costs grew at a faster rate than total revenues over the five-year period.
Operating Income Volatility
Operating income demonstrated substantial volatility, peaking at 22.03% in 2021 before plummeting to 7.77% in 2022. The 2021 peak was heavily influenced by a non-recurring net gain on dispositions, which contributed 8.20% to revenues that year. The absence of such gains in 2022 (0.19%), combined with rising SG&A, resulted in a severe contraction of operating profitability.
Non-Operating Items and Interest
Interest expenses remained relatively stable, fluctuating between 3.09% and 4.08% of revenues. Other non-operating items, including foreign exchange losses and pension costs, remained minimal, though foreign exchange losses showed a slight increase to 0.19% by 2022.
Bottom-Line Net Earnings
Net earnings attributable to common stock followed a downward trend, ending at 3.47% in 2022, compared to 13.50% in 2018. The most dramatic drop occurred between 2021 (15.74%) and 2022, reflecting the cumulative impact of compressed gross margins, increased administrative spending, and the lack of significant asset disposition gains.

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