Shares of Paramount Global (NASDAQ: PARA) fell 34.8% in May 2023, according to data from S&P Global Market Intelligence. The media veteran's first-quarter report didn't just fall short of expectations, but it also inspired a dramatic dividend cut. Later, its largest shareholder publicly wondered why he even holds this stock.

Paramount's first-quarter sales dropped 1% lower year over year to $7.27 billion. The Paramount+ streaming service pulled its weight with a 39% revenue increase, balancing out a large drop in the TV segment's ad-based sales. But the streaming channel remained firmly unprofitable and all three of Paramount's reporting segments saw either falling operating profits or larger operating losses. Hence, adjusted earnings fell from $0.60 to $0.09 per diluted share. The average Wall Street analyst had expected earnings of roughly $0.17 per share on sales near $7.42 billion.

In an effort to conserve cash for the benefit of content production and general financial flexibility, Paramount cut its dividend payouts dramatically. The company has been paying out $0.24 per share, per quarter, for several years but the next payout will be worth $0.05 per share. The effective dividend yield plunged from a generous 4.1% to a thrifty 0.9%. It was no surprise to see Paramount investors walking away from that greatly reduced cash-sharing policy. Thanks to the price drop, Paramount's annual yield now stands at 1.3%.

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Source Fool.com