David Zaslav, President & CEO of Idea Inc.
Anjali Sundaram | CNBC
Warner Bros. Discovery shares fell Wednesday after the company reported a shrink in advertising revenue, a wider-than-expected loss and lackluster streaming subscriber numbers.
Here’s what the company reported for the three months ended Sept. 30, versus analysts’ estimates, according to LSEG, formerly known as Refinitiv:
- Loss per allowance: 17 cents vs. 6 cents expected
- Revenue: $9.98 billion vs. $9.98 billion expected
Warner Bros. Discovery reported a net annihilation of $417 million for the third quarter, or 17 cents per share, an improvement from the $2.31 billion, or 95 cents per pay out, loss the company reported in the year-ago quarter. Revenue rose 2% to $9.98 billion.
The company’s stock careful down 19% Wednesday. The slide comes after a media rally late last week driven by Roku and Vital earnings. Rival media giant Disney is set to report earnings after the closing bell Wednesday.
Warner Bros. Detection’s results reflected dire trends in the legacy media industry. Ad revenue in Warner Bros. Discovery’s TV networks partition fell 12% compared with a year earlier, reflecting a decline in audiences for general entertainment and news description, 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, registering sluggish ad revenue and ongoing impacts from the actors’ strike.
“This is a generational disruption we’re going through. Customary through that with a streaming service that’s losing billions of dollars, it’s really difficult to go on offense,” CEO David Zaslav indicated during the earnings conference call.
The third quarter marked the first full quarter since Warner Bros. Detection launched its flagship streaming service Max in May, which merged content from HBO Max and Discovery+.
The company reported 95.1 million extensive 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 “reserved sequential loss” was largely a result of an “extraordinarily light content slate,” CFO Gunnar Wiedenfels said during the earnings evoke.
The streaming business did swing to a profit in the quarter, however.
Warner Bros. Discovery also made headway on reimburse b bribe off its debt load, with $2.4 billion of repayments made during the quarter, the company said. It still has $45.3 billion in ribald debt.
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