David Zaslav, President & CEO of Discovery Inc.
Anjali Sundaram | CNBC
Warner Bros. Discovery shares fell Wednesday after the company reported a decline in advertising revenue, a wider-than-expected loss and lackluster streaming subscriber numbers.
Here’s what the company reported for the quarter ended Sept. 30, versus analysts’ estimates, according to LSEG, formerly known as Refinitiv:
- Loss per share: 17 cents vs. 6 cents expected
- Revenue: $9.98 billion vs. $9.98 billion expected
Warner Bros. Discovery reported a net loss of $417 million for the third quarter, or 17 cents per share, an improvement from the $2.31 billion, or 95 cents per share, loss the company reported in the year-ago quarter. Revenue rose 2% to $9.98 billion.
The company’s stock closed down 19% Wednesday. The slide comes after a media rally late last week driven by Roku and Paramount earnings. Rival media giant Disney is set to report earnings after the closing bell Wednesday.
Warner Bros. Discovery’s results reflected dire trends in the legacy media industry. Ad revenue in Warner Bros. Discovery’s TV networks segment fell 12% compared with a year earlier, reflecting a decline in audiences for general entertainment and news programming, as well as soft ad trends in the U.S., the company said.
The company also warned of a number of obstacles heading into 2024, including sluggish ad revenue and ongoing impacts from the actors’ strike.
“This is a generational disruption we’re going through. Going through that with a streaming service that’s losing billions of dollars, it’s really difficult to go on offense,” CEO David Zaslav said during the earnings conference call.
The third quarter marked the first full quarter since Warner Bros. Discovery launched its flagship streaming service Max in May, which merged content from HBO Max and Discovery+.
The company reported 95.1 million global direct-to-consumer subscribers, a 700,000 decrease from the previous quarter, and less than the analyst projection of 95.4 million subscribers, according to StreetAccount.
The “modest sequential loss” was largely a result of an “extraordinarily light content slate,” CFO Gunnar Wiedenfels said during the earnings call.
The streaming business did swing to a profit in the quarter, however.
Warner Bros. Discovery also made headway on paying off its debt load, with $2.4 billion of repayments made during the quarter, the company said. It still has $45.3 billion in gross debt.
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