Paramount Posts Steep Earnings Decline

Paramount Communications Inc. suffered a 52.9% drop in earnings in fiscal 1991 because of the weak performance of its film and television divisions, declining interest income and costly writedowns, the company said Tuesday.

Earnings fell 24.6% in the fiscal fourth quarter.

Paramount Chairman Martin S. Davis called the results disappointing, but added that the New York-based entertainment company has taken “decisive steps” to strengthen management, improve its infrastructure and reduce overhead.

Davis said the company has received a boost from the success of “The Addams Family” and “Star Trek VI,” which will be reflected in first-quarter results.

Paramount’s stock closed at $40.75, up $1.375 a share, in New York Stock Exchange trading. Paul Marsh of Kemper Securities said the earnings were “in line with expectations.”

Paramount, which suffered from a nationwide downturn in spending on entertainment, earned $122.1 million, or $1.03 a share, in fiscal 1991, compared to $259.1 million, or $2.16 a share, a year ago. Revenue was up 0.7%, to $3.895 billion from $3.869 billion.

There was a $35.4-million charge against earnings due to movie and television cost writedowns and a management overhaul that included a multimillion-dollar settlement with former studio chief Frank Mancuso.

Paramount earned $83.3 million, or 70 cents a share, for the three months ended Oct. 31, compared to $110.5 million, or 93 cents a share, a year earlier. Revenue dropped by 1% to $1.166 billion in the quarter from $1.178 billion the year before.