Business

Coca-Cola reported quarterly earnings and revenue that topped Wall Street’s expectations.
The beverage giant also raised its outlook for its full-year organic revenue.
Coke reported that its global unit case volume increased 1%.

A Coca-Cola building in Zagreb, Croatia, Nov. 8, 2023.
Denis Lovrovic | AFP | Getty Images

Coca-Cola on Tuesday reported quarterly earnings and revenue that beat analysts’ expectations.
The beverage giant also raised its full-year outlook for organic revenue.

Shares of the company fell less than 1% in premarket trading.
Here’s what the company reported compared with what Wall Street was expecting, based on a survey of analysts by LSEG:

Earnings per share: 72 cents adjusted vs. 70 cents expected
Revenue: $11.30 billion vs. $11.01 billion expected

Coke reported first-quarter net income attributable to the company of $3.18 billion, or 74 cents per share, up from $3.11 billion, or 72 cents a share, a year earlier.
Excluding items, the beverage giant earned 72 cents per share.
Net sales rose 3% to $11.30 billion. Organic sales, which strip out the impact of acquisitions, divestitures and foreign exchange, climbed 11% in the quarter.

Coke reported its global unit case volume increased 1%, but its North American volume was flat for the quarter. The metric excludes pricing and foreign currency.
Coke’s sparkling soft drinks division, which includes its namesake soda, reported volume growth of 2%.
The company’s juice, dairy and plant-based drinks segment saw volume grow 2% in the quarter, fueled by demand in North America.
Only Coke’s water, sports, coffee and tea division reported declining volume. The segment’s volume fell 2% in the quarter as bottled water, sports drinks and coffee all saw demand weaken.
Coke’s overall prices were up 13% compared with the year-ago period, but about half of that came from hyperinflation in certain markets, like Argentina.
For the full year, Coke is now expecting organic revenue growth of 8% to 9%, up from its prior range of 6% to 7%. The company said it anticipates price hikes in certain markets experiencing “intense inflation,” leading in part to its new outlook.
Coke reiterated its outlook for full-year comparable earnings growth of 4% to 5%.
In the second quarter, the company expects that its comparable revenue will include a 6% currency headwind and a 5% to 6% hit from acquisitions, divestitures and structural changes. Currency fluctuations are also expected to pose a 8% to 9% headwind to its comparable earnings per share.

Don’t miss these exclusives from CNBC PRO More

Dave & Buster’s will begin offering loyalty members the ability to bet on its games.
Adults age 18 and older will be able to place real money wagers on arcade games with friends.
The technology is expected to be available in the coming months.

Arcade giant Dave & Buster’s is taking its games to a new level by offering social wagering on its app.
Customers can soon make a friendly $5 wager on a Hot Shots basketball game, a bet on a Skee-Ball competition or on another arcade game. The betting function, expected to launch in the next few months, will work through the company’s app.

Dave & Buster’s, started in 1982, now has more than 222 venues in North America, offering everything from bowling to laser tag, plus virtual reality. The company says it has five million loyalty members and 30 million unique visitors to its locations each year. The company’s stock is up more than 50% over the past year.
As a boom in betting increases engagement among sports fans, digital gamification could have a similar effect within Dave & Buster’s customer base by allowing loyalty members to compete with one another and earn rewards. Ultimately, it could mean people spend more time and money at the venues.
Dave and Buster’s is using technology by gamification software company Lucra.

A general view of the atmosphere during The SDI Takeover @ Dave & Buster’s in Los Angeles on June 23, 2022
Tiffany Rose | Getty Images

“We’re thrilled to work with Lucra to bring this exciting new gaming platform to our customers,” said Simon Murray, senior vice president of entertainment and attractions at Dave & Buster’s. “This new partnership gives our loyalty members real-time, unrivaled gaming experiences, and reinforces our commitment to continuing to elevate our customer experience through innovative, cutting-edge technology.”
Lucra, created in 2019 by then-Stanford Graduate School of Business classmates Dylan Robbins and Michael Madding, is a software platform that allows users to compete for real money on friendly competitions. Robbins and Madding previously worked together at Goldman Sachs.

“Lucra helps our partners drive user adoption, increase retention and engagement and add new monetization streams to their business,” said Robbins, Lucra’s CEO.
Robbins and Madding saw the incredible growth of legal sports betting, but sought to capitalize on the recreational wagers taking place between peers. The company has raised about $14 million with investors that include billionaire investor Marc Lasry, former and current professional athletes John Isner and Julie and Zach Ertz, along with the Raptor Group and SeventySix Capital.
“We’re creating a new form of kind of a digital experience for folks inside of these ecosystems,” said Madding, Lucra’s chief operating officer. “We’re getting them to engage in a new way and spend more time and money,” he added.
Lucra says its skills-based games are not subject to the same licenses and regulations gambling operators face with games of chance. Lucra is careful not to use the term “bet” or “wager” to describe its games.
“We use real-money contests or challenges,” Madding said.
Lucra’s contests are only available to players age 18 and older. The contests are available in 44 states.
The social betting category is a $6 billion industry, according to gaming research firm Eilers & Krejcik. Several companies such as Fliff and ReBet have emerged, hoping to mimic the success of the gambling industry and capture a younger market.
Lucra recently signed a deal with Dupr, the pickleball ratings system, and TennisOne, a tennis app, to allow players to compete against one another for real money. Lucra’s app has been downloaded 150,000 times, facilitated more than one million unique contests on the platform and collected more than $20 million of handle, according to the company.
“Whether you’re playing pickleball with your friends or playing golf on the weekend, we help to amplify that and digitize that experience with our partners,” said Robbins. More

Walmart is launching a new grocery brand called Bettergoods.
More retailers are stepping up their private label offerings, as shoppers seek new flavors and lower prices.
Plus, the growth of low-priced grocery chains like Aldi, Lidl and Trader Joe’s has increased customers’ willingness to stray from national brands.

People talk outside a Wal-Mart Pickup-Grocery store in Bentonville, Arkansas.
Rick Wilking | Reuters

Walmart is debuting a new grocery brand, as the discounter tries to retain the shoppers it has attracted during a period of high inflation.
On Tuesday, the big-box retailer said it will roll out a private label called Bettergoods, a line of more trend-and chef-driven foods. Most items will be priced at less than $5.

Walmart is already the country’s largest grocer by revenue. Nearly 60% of the company’s sales in the U.S. came from its grocery business in the most recent fiscal year.
Walmart’s large food business has helped it drive store and online traffic, especially as customers have watched their discretionary spending during a time of high inflation. And its low-priced reputation has helped the company attract higher-income grocery shoppers as inflation pinches budgets.
In the most recent fiscal year that ended in late January, Walmart’s net sales for groceries in the U.S. rose nearly 7% year over year to $264.2 billion.

An employee restocks frozen food products at a Walmart Inc. store in Burbank, California.
Patrick T. Fallon | Bloomberg | Getty Images

But Walmart, like other grocers, has seen room to grow its private-label business as shoppers seek new flavors and lower prices. During the Covid-19 pandemic, some national brands’ products ran low at stores and caused customers to start buying the retailers’ own brands.
Later, inflation pushed prices of food and housing higher and inspired more shoppers to try store brands, which are often cheaper. Plus, the growth of low-priced grocery chains like Aldi, Lidl and Trader Joe’s — which prominently feature their own private labels rather than national ones — and the popularity of Costco’s Kirkland has changed customers’ perception of store brands.

Grocers have also overhauled their private-label approach. Instead of relying on basic items like canned peas or copycat items like a lower-priced box of cereal that resembles Cheerios to make up their store brand, retailers began debuting more unique food items.
For example, Target launched a new grocery brand called Good & Gather in 2019 with a wide range of items including bagged salad kits, peanut butter spreads and frozen veggies. Another grocery brand it debuted, Favorite Day, is made up of creative takes on ice cream bars and trail mixes.
Other retailers have introduced new private brands in their grocery aisles focused on affordability and fending off discounters like Aldi or Dollar General. Kroger, for example, launched Smart Way two years ago. The brand offers low-priced basics like mayonnaise and sliced bread.
Walmart’s new grocery brand, Bettergoods, will be made up of items across many categories including frozen foods, dairy and snacks ranging from under $2 to under $15. The products will fit within one of three major areas, the company said: items with more of a culinary flair, such as a jarred creamy corn jalapeño chowder; items that are plant-based, such as a pint of oat milk nondairy frozen dessert; or items that exclude certain ingredients, such as gluten- and antibiotic-free chicken nuggets.
Bettergoods will join Walmart’s existing collection of private brands in the grocery department, which includes Great Value — the country’s largest private grocery brand by revenue, according to Numerator, a market research firm.

Don’t miss these exclusives from CNBC PRO More

Eli Lilly reported first-quarter adjusted profit that topped Wall Street’s expectations.
The company also hiked its full-year guidance on strong sales of its blockbuster diabetes drug Mounjaro and newly launched weight loss treatment Zepbound.
Zepbound reported $517.4 million in sales for the first quarter, even as most doses of the drug slipped into shortages in the U.S. that are expected to last through June.

Eli Lilly logo is shown on one of the company’s offices in San Diego, California, U.S., September 17, 2020. 
Mike Blake | Reuters

Eli Lilly on Tuesday reported first-quarter adjusted profit that topped Wall Street’s expectations and hiked its full-year guidance on strong sales of its blockbuster diabetes drug Mounjaro and newly launched weight loss treatment Zepbound.
The drugmaker now expects full-year adjusted earnings of $13.50 to $14.00 per share, up from previous guidance of $12.20 to $12.70 per share. Eli Lilly also expects revenue for the year to come in between $42.4 billion and $43.6 billion, an increase of $2 billion at either end of the range.

Analysts surveyed by LSEG expected full-year adjusted earnings of $12.50 per share and sales of $41.44 billion. 
The company said the boosted guidance is in part due to “greater visibility” into its production expansion of Zepbound, Mounjaro and similar drugs for the rest of the year.
The results and guidance raise reflect Zepbound’s first full quarter on the U.S. market after winning approval from regulators in early November. The drug reported $517.4 million in sales for the first quarter, even as most doses of the drug slipped into shortages in the U.S. that are expected to last through June.
Analysts say the weekly injection could post more than a billion dollars in sales in its first year on the market and potentially become the biggest drug of all time.
Eli Lilly noted that demand for Mounjaro and Zepbound — treatments known as incretin drugs, which mimic hormones produced in the gut to suppress a person’s appetite and regulate their blood sugar — outpaced increases in supply during the quarter.

The company said it is continuing to expand its manufacturing footprint, with the most significant production increases expected in the second half of the year.
“Our top priority is making more product, and we’re doing everything we can to do that,” Eli Lilly CEO David Ricks said in an interview Tuesday on CNBC’s “Squawk Box.” “We’re ramping that aggressively. But it’s capital intensive, it’s technically complex and highly regulated.”
Ricks added that Mounjaro and Zepbound are among the “most complicated medicines we’ve ever made.”
Here’s what Eli Lilly reported for the first quarter compared with what Wall Street was expecting, based on a survey of analysts by LSEG: 

Earnings per share: $2.58 adjusted vs. $2.46 expected
Revenue: $8.77 billion vs. $8.92 billion expected

Eli Lilly posted net income of $2.24 billion, or $2.48 a share, for the first quarter. That compares with a profit of $1.34 billion, or $1.49 a share, a year earlier. 
Excluding one-time items associated with the value of intangible assets, among other adjustments, the company posted a per-share profit of $2.58 for the first quarter of 2024.
The pharmaceutical giant booked first-quarter revenue of $8.77 billion, up 26% year over year.
Shares of Eli Lilly jumped almost 7% in premarket trading Tuesday. They’re up 26% this year after surging almost 60% in 2023 due to the insatiable demand for the company’s weight loss and diabetes drugs. That’s despite their hefty price tags, spotty insurance coverage and intermittent supply shortages. 
With a market cap of about $700 billion, Eli Lilly is the largest pharmaceutical company based in the U.S. 

Mounjaro, Trulicity results

Both of the company’s top-selling diabetes drugs missed Wall Street’s expectations for the first quarter.
Mounjaro brought in $1.81 billion in revenue in the first quarter, more than triple the $568.5 million it booked during the year-earlier period. However, analysts were expecting sales of $2.11 billion, according to StreetAccount. 
Eli Lilly said higher prices for Mounjaro helped drive up revenue, specifically citing decreased use of savings card programs for the drug in the U.S.

More CNBC health coverage

But the company said those savings card dynamics should “cease to have a notable effect on realized price comparisons” because the $25 monthly coupon for patients who don’t have insurance coverage for Mounjaro expired in June. 
Meanwhile, sales of Eli Lilly’s older diabetes drug Trulicity plummeted 26% during the first quarter to $1.46 billion. That’s lower than the $1.59 billion that analysts were expecting, according to StreetAccount. 
In the U.S., declining sales were primarily due to supply constraints and competition with other diabetes treatments, according to Eli Lilly. Revenue outside the U.S. also decreased, driven by lower demand and realized prices, as well as tight supply.

Other drugs miss expectations

Revenue growth was also driven by sales of Eli Lilly’s breast cancer pill Verzenio, which rose 40% to $1.05 billion for the quarter due to increased demand. 
Those results came in under analysts’ expectations, however, which called for $1.11 billion in sales for the period. 
Sales of Jardiance, a tablet that lowers blood sugar in Type 2 diabetes patients, climbed 19% to $686.5 million for the first quarter. Analysts had expected $718.3 million in sales from Jardiance. 
Jardiance, which Eli Lilly shares with Boehringer Ingelheim, is among the first 10 drugs selected to face price negotiations with the federal Medicare program.

Don’t miss these exclusives from CNBC PRO More

Restaurant Brands International is committing another $300 million to remodeling Burger King’s U.S. restaurants.
Altogether, the restaurant company is planning to spend $2.2 billion to revive the fast-food chain’s U.S. business.
Burger King expects that 85% to 90% of its roughly 7,000 U.S. restaurants will have the same modern design by 2028.

The Burger King logo is displayed at a Burger King fast food restaurant on January 17, 2024 in Burbank, California. 
Mario Tama | Getty Images

Burger King will invest another $300 million to remodel about 1,100 of its U.S. restaurants as part of a broader turnaround effort, the chain’s parent company said Tuesday.
Owner Restaurant Brands International kicked off Burger King’s comeback strategy a year and half ago with $250 million to renovate restaurants and upgrade its technology and equipment, plus an additional $150 million to invest in its mobile app and advertising.

In January, the parent company bought Burger King’s largest U.S. franchisee, Carrols Restaurant Group, for $1 billion to speed up the remodeling process. The company estimates it will spend an additional $500 million updating 600 Carrols’ locations.
Including the investment announced Tuesday, Restaurant Brands is planning to spend around $2.2 billion to revitalize the chain’s U.S. business. The company expects 85% to 90% of its roughly 7,000 U.S. restaurants will have the same modern design by 2028.
“It was the first time in a long time that RBI had invested a significant amount of capital back into the business to co-invest with franchisees,” Burger King U.S. President Tom Curtis told CNBC. “I think the process was, ‘Let’s see how this works’… and we’re seeing early results on remodels.”
About 100 Burger King locations have been remodeled and updated so far. Those locations have seen sales climb following their facelifts, according to Curtis.
The latest round of remodels will follow Burger King’s new “Sizzle” design, which includes drive-thru pickup for mobile orders and self-order kiosks. Those new features are expected to encourage customers to order even more Whoppers and fries.

Still, Burger King has had to chip in its own money to incentivize franchisees to remodel. Renovations can be costly — especially with high interest rates — and often require the locations to temporarily shutter.
As with the initial round of investment from Restaurant Brands, Burger King franchisees who opt in to remodel their locations will receive cash once construction is completed. Burger King will let operators choose how much of a discount they get on the royalties they pay to the company.
Starting Tuesday, Curtis will be on a roadshow across the U.S. pitching the remodeling strategy to franchisees and starting the sign-up process for the $300 million investment.
Shares of Restaurant Brands were flat in premarket trading on Tuesday after the company reported weaker-than-expected earnings, but its quarterly revenue topped Wall Street estimates. Burger King’s same-store sales grew 3.8% in the the first quarter, falling shy of StreetAccount estimates of 4.1%.

Don’t miss these exclusives from CNBC PRO More

Walmart said it will close all of its healthcare clinics across the country, a stunning reversal of its plans to bring its low-priced reputation to the dentist and doctor office along with the grocery aisle. 
The big-box retailer said it would also shutter its telehealth provider, which it acquired for an undisclosed amount in 2021.
In a release, the company said it could not operate a profitable business due to a challenging reimbursement environment and rising costs.

The front desk is visible Friday, March 29, 2024, at the new Walmart Health Center in Sugar Land which will offer primary care, dental, counseling, lab and X-ray services at the location on Highway 6.
Kirk Sides | Houston Chronicle | Hearst Newspapers | Getty Images

Walmart on Tuesday said it will close all of its health-care clinics across the country, a stunning reversal of its plans to bring its low-priced reputation to the dentist and doctor’s office along with the grocery aisle. 
The big-box retailer said it would also shutter its telehealth provider, which it acquired for an undisclosed amount in 2021.

Walmart will close 51 clinic locations across Arkansas, Florida, Georgia, Illinois and Texas, plans that won’t affect the company’s 4,600 pharmacies and more than 3,000 vision centers, the company said in a release. The clinic will close over the next 45 to 90 days, two people familiar with the matter told CNBC. 
Walmart blamed its plans to shutter clinics on a broken business model. In the release, it described the move as “a difficult decision,” but said it couldn’t operate a profitable business because of “the challenging reimbursement environment and escalating operating costs.”
The shortage of health-care workers in the U.S. has also increased the company’s labor costs, according to the sources familiar with the matter. 
The announcement comes just a month after Walmart said it planned to double the size of its clinic footprint by opening up 22 new locations this year and more in 2025. 
Walmart’s announcement is also another sign of how challenging it is to disrupt and radically improve American health care – an expensive, complicated and entrenched system of doctors, insurers, drug manufacturers and other players that costs the nation more than $4 trillion a year. 

Walmart opened its first Walmart Health clinic in Georgia in 2019, and then gradually opened more clinics next door to its big-box stores. Customers, who typically shopped Walmart’s aisles for groceries or household items, could also stop by for a doctor or dentist appointment or therapy session. The clinics offered other services, too, such as flu tests, X-rays and stiches.
Those health-care services came with a low price tag, such as $30 for an annual check-up for adults, $45 for a 45-minute counseling session or as little as $25 for an adult teeth cleaning.
At a conference in fall 2019, then-Walmart CFO Brett Biggs touted the company’s ambitions to investors. He referred to how Walmart had used its large size to bring down the price of many common generic drugs to as low as $4 at its pharmacies and planned to do that for other parts of healthcare.
“It’s more than test and learn because we know that this is a place we can have a massive difference on how people live,” he told investors at the time. “When we think about ‘Save money, live better,’ we can do both with what we can do in healthcare. And so, we plan to be a big player going forward in what happens in healthcare.”
Yet in the following years, Walmart opened new clinics at a slow pace and faced new challenges and competitive dynamics — including keeping its store shelves stocked and locations staffed during the Covid-19 pandemic. Walmart struggled with high executive turnover and cycled through numerous leaders of Walmart Health. And CVS Health, Walgreens Boots Alliance and Amazon all announced their own ambitions to open or acquire doctor offices. Amazon last year closed a $3.9 billion deal to buy primary-care provider One Medical.
Meanwhile, on earnings calls and at investor meetings, Walmart CEO Doug McMillon and other company leaders instead highlighted other emerging and higher-margin businesses, such as its growing advertising business and its third-party marketplace.
Going forward, Walmart will return to the health services it offered before the Walmart Health push: It will continue to operate its thousands of pharmacies and vision centers.
Walmart said its clinics will continue to see patients with scheduled appointments until their doors close, the people familiar with the matter told CNBC. The company will also help patients find high-quality providers in their insurance networks to ensure they continue to get care, the people said.
Walmart Health marks the latest failed push into health care by a high-profile company, following the disbandment of a joint venture between JPMorgan Chase, Berkshire Hathaway and Amazon in 2021. 
Before it announced the closures, Walmart was among a slate of retail giants racing to build up their primary care presence as demand grows for convenient and affordable medical care. Walmart grew its clinic business at a slower pace than its competitors, but some companies have struggled to balance their expansion plans with their swelling networks of patients. 
Walgreens said in March it had closed 140 of its VillageMD primary care clinics and plans to shutter 20 more to boost the profitability of its broader health-care division. Walgreens also recorded a nearly $6 billion charge in the first quarter related to the decline in value of VillageMD, which has generated disappointing returns since the company became a majority owner of the business in 2021. 
Meanwhile, Amazon’s health clinic operator One Medical now has more than 125 locations nationwide.
Walmart has made several other plays in the health-care space, including partnering with an insurer and health system on care coordination in Florida. But Walmart will no longer see patients under that partnership moving forward, according to the two sources familiar with the matter.
Walmart bought a chronic condition management platform called CareZone in 2020 for an undisclosed amount.  More

A federal judge in New Jersey rejected Johnson & Johnson’s and Bristol Myers Squibb’s legal challenges to the Biden administration’s Medicare drug-price negotiations, ruling that the program is constitutional. 
The decision is another win for the White House in a bitter legal fight with several drugmakers over the constitutionality of the price talks.
The ruling also weakens the pharmaceutical industry’s strategy of seeking split decisions in lower courts scattered across the U.S., which could escalate the issue to the Supreme Court. 

Jonathan Raa | Nurphoto | Getty Images

A federal judge in New Jersey on Monday rejected Johnson & Johnson’s and Bristol Myers Squibb’s legal challenges to the Biden administration’s Medicare drug-price negotiations, ruling that the program is constitutional. 
The decision is another win for the White House in a bitter legal fight with several drugmakers over the price talks. The ruling also weakens the pharmaceutical industry’s strategy of seeking split decisions in lower courts scattered across the U.S., which could escalate the issue to the Supreme Court. 

Medicare drug-price negotiations are a key policy under President Joe Biden’s Inflation Reduction Act that aims to make costly medications more affordable for seniors. In doing so, it could take a bite out of drugmakers’ profits. Final negotiated prices for the first round of drugs subject to the talks, which includes one each from J&J and Bristol Myers, will go into effect in 2026. 
J&J and Bristol Myers Squibb did not immediately respond to requests for comment on the ruling. 
In separate lawsuits, the drugmakers argued that the negotiations are an unconstitutional confiscation of their drugs by the government and a violation of their right to freedom of speech. They also argued that the talks are an unconstitutional condition to participate in the Medicaid and Medicare programs.
But Judge Zahid Quraishi of the District of New Jersey wrote in a 26-page opinion that participation in the price talks and Medicare and Medicaid markets is voluntary.
The negotiations don’t require drugmakers to “set aside, keep or otherwise reserve any of their drugs” for the use of the government or Medicare beneficiaries, he wrote. Quraishi added the talks don’t force manufacturers to physically transmit or transport drugs at a new negotiated price.

“Selling to Medicare may be less profitable than it was before the institution of the Program, but that does not make [J&J and Bristol Myers Squibb’s] decision to participate any less voluntary,” Quraishi wrote. “For the reasons provided, the Court concludes that the Program does not result in a physical taking nor direct appropriation” of medications from the two drugmakers. 
J&J, Bristol Myers Squibb, Novo Nordisk and Novartis presented their oral arguments before Quraishi during the same hearing in March.That same month, a federal judge in Delaware rejected AstraZeneca’s separate lawsuit challenging the negotiations. In Texas, a third federal judge tossed a separate lawsuit in February.A federal judge in Ohio also issued a ruling in September denying a preliminary injunction sought by the Chamber of Commerce, one of the largest lobbying groups in the country, which aimed to block the price talks before Oct. 1.

Don’t miss these exclusives from CNBC PRO More

Paramount Global announced Bob Bakish is stepping down as CEO of the media company.
He’ll be replaced by three executives in what the company called the “Office of the CEO.”
Bakish’s exit comes as Paramount continues merger talks with Skydance.

Bob Bakish, president and chief executive officer of Viacom, attends the fourth day of the annual Allen & Company Sun Valley Conference, July 11, 2023 in Sun Valley, Idaho. 
David A. Grogan | CNBC

Paramount Global CEO Bob Bakish is stepping down, the company announced Monday, as merger negotiations with Skydance Media continue.
Bakish climbed the corporate ladder after joining Viacom in 1997, until he became CEO of the company in 2016. Following the merger of Viacom and CBS, he became CEO of the combined company in 2019, which was later renamed Paramount Global. He is also leaving the company’s board of directors, Paramount said Monday.

Bakish will be replaced by what the company called an “Office of the CEO.” Paramount will now be led by CBS president and CEO George Cheeks; Chris McCarthy, president and CEO of Showtime/MTV Entertainment Studios and Paramount Media Networks; and Brian Robbins, the head of Paramount Pictures and Nickelodeon. The company said the three executives will work closely with Paramount CFO Naveen Chopra and the board.
In the release Monday, Paramount said the new leadership is “working with the board to develop a comprehensive, long-range plan to accelerate growth and develop popular content, materially streamline operations, strengthen the balance sheet, and continue to optimize the streaming strategy.”
Paramount also reported its first-quarter earnings after the bell Monday and held an earnings call during which the newly appointed company heads gave a brief statement and said they would be back “in short order” to share details on future plans.
Chopra led the call, which lasted under 10 minutes and didn’t include questions from analysts.

Streaming boost

The company posted mixed results for the first quarter, beating on earnings but missing on revenue. Paramount reported 62 cents per share for the period, excluding items, versus estimates of 36 cents a share, according to analysts polled by LSEG. For revenue the company posted $7.69 billion versus analyst estimates of $7.73 billion, according to LSEG.

Overall revenue was up 6% compared with the same period last year, propelled by streaming and the Super Bowl.
The company’s direct-to-consumer streaming segment, which includes flagship service Paramount+, Pluto TV and BET+ saw revenue rise 24% to about $1.88 billion.
Paramount said it added 3.7 million Paramount+ subscribers during the quarter, bringing the total to 71 million. Losses related to streaming narrowed to $286 million compared with losses of $511 million during the same period last year.
Advertising revenue in the streaming segment was up, largely due to the Super Bowl, which aired in February on CBS, cable TV channel Nickelodeon and Paramount+.
Similarly, advertising revenue in Paramount’s TV media unit, which includes broadcaster CBS and cable TV channels such as MTV and Nickelodeon, grew 14% due to the Super Bowl.
The top NFL event provided a boost during what has been a sluggish advertising environment for traditional TV networks. Still, streaming platforms and digital companies have reported advertising revenue growth, indicating the market is rebounding, at least for those areas.
Overall, TV Media revenue was up 1% to $5.23 billion. Affiliate and subscription revenue fell 3% as cord-cutting continued, and licensing and other revenue dropped 25%, including the impact of the Hollywood writers’ and actors’ strikes on content available for licensing.
Revenue for Paramount’s filmed entertainment unit increased 3% to $605 million due to the releases of “Mean Girls” and “Bob Marley: One Love.”

Bakish departure

Bakish’s ouster comes as Paramount and Skydance Media inch closer to a possible merger, CNBC previously reported. The companies are in exclusive talks to pursue the deal until May 3, and a special committee is already in place.
Bakish has privately dissented against the merger, claiming it will dilute common shareholders, CNBC reported. As part of the proposed deal, nearly 50% of the merged company would be owned by Skydance and its private equity backers, while common shareholders would own the remainder of Paramount, which would remain publicly traded.
On Saturday CNBC reported Bakish could be out as CEO as soon as Monday, and ahead of the earnings call, after losing the trust of Paramount Global controlling shareholder Shari Redstone, who could see his removal as a means to accelerate a Skydance deal, CNBC reported Monday.
The departure also comes as Paramount has been in negotiations with cable company Charter Communications for the carriage of its TV networks including CBS and MTV. The deadline for those negotiations is Tuesday.
The special committee — which is in charge of accepting or rejecting transactions — and Skydance, which is backed by private equity firms KKR and RedBird Capital Partners, have been narrowing in on how to value Skydance’s assets as part of a merger, as well as how much equity to add to the company, CNBC previously reported.
Skydance intends to name its CEO, David Ellison, as head of Paramount if the deal happens, CNBC previously reported.
— CNBC’s Alex Sherman contributed to this report.

Don’t miss these exclusives from CNBC PRO More