Paramount Skydance shares drop 5% despite Q1 earnings beat due to cautious future outlook

Paramount Skydance shares fell nearly 5% after reporting Q1 earnings that beat expectations with revenue of $7.35 billion and adjusted EPS of $0.23. The company added 700,000 Paramount+ subscribers and saw strong growth in direct-to-consumer and studio revenues. Despite the positive results, investors reacted negatively to the cautious full-year guidance of $30 billion revenue and $3.8 billion adjusted EBITDA, as well as concerns over the pending Warner Bros. Discovery deal and its impact on leverage and legacy TV exposure. Management remains confident about regulatory approval and future profitability improvements.