With only three new movies in theaters during the second quarter -- one a 3-D re-release and another released on behalf of a separate company -- Paramount Pictures revenue plunged 29% to $1 billion.
Thanks to sharply lower expenses, however, the studio’s operating income dropped only 6% to $29 million, according to financial results released by parent company Viacom Inc. on Friday.
Among Paramount’s releases in the three-month period ended June 30, “Titanic 3-D” was a huge hit, grossing $343.6 million worldwide, which was split between the L.A. studio and partner 20th Century Fox. “Madagascar 3: Europe’s Most Wanted” has taken in a strong $501 million so far, though Paramount keeps just 8% of revenue from the DreamWorks Animation release. Paramount’s only new self-produced movie, the Sacha Baron Cohen comedy "The Dictator,” generated a soft $60 million domestically, but a healthier $106 million internationally.
Those couldn’t compare to last year, when in addition to the successful DreamWorks movie "Kung Fu Panda 2," Paramount earned a fee on the Marvel hit "Thor" and had its own successful films "Super 8" and "Transformers: Dark of the Moon." As a result, theatrical revenue for this period was down 52% to $283 million.
Home entertainment revenue dropped a more modest 8% and television licensing fell 24%.
The studio’s bottom line barely suffered, however, in part because of ongoing cost cutting including 120 layoffs last fall. In addition, marketing spending was far lower than a year ago, particularly because of the hefty expense to release "Transformers" on June 29, 2011. This year’s planned late June release, "G.I. Joe: Retaliation," was delayed to March 2013, just five weeks before it was scheduled to open. As a result, Paramount saved what likely would have been more than $100 million in spending on advertisements and film prints.
Paramount will also get an 8% share of revenue from May’s $1.5 billion box office blockbuster “The Avengers" as part of a deal it made last year to allow Walt Disney Studios to release the Marvel film. However, there was no mention of that movie in Viacom’s financial results, indicating that the revenue was not recorded during the second quarter.