Warner Bros. Discovery’s stock dropped on Wednesday following the company’s announcement of a drop in advertising revenue, a larger-than-anticipated loss, and a lackluster number of streaming subscribers.
LSEG, formerly known as Refinitiv, reports that the following is what the company reported for the quarter that ended on September 30, compared to analysts’ estimates:
- Share loss: 17 cents as opposed to the predicted 6 cents.
- Income: $9.98 billion as opposed to $9.98 billion anticipated.
In comparison to the $2.31 billion, or 95 cents per share, loss the company reported in the same quarter last year, Warner Bros. Discovery reported a net loss of $417 million, or 17 cents per share, for the third quarter. Sales increased by 2% to $9.98 billion.
On Wednesday, the company’s stock finished 19% lower. The decline follows a late-week media rally fueled by Roku and Paramount’s earnings. After the closing bell on Wednesday, rival media behemoth Disney is scheduled to release its earnings report.
The outcomes of Warner Bros. Discovery showed alarming patterns in the traditional media sector. The TV networks segment of Warner Bros. Discovery saw a 12% decrease in ad revenue from the previous year, the company said. This decline was attributed to soft ad trends in the US as well as a decline in audiences for news and general entertainment programming.
In addition, the business issued a warning about several challenges that would face it in 2024, such as slowing ad revenue and the prolonged effects of the actors’ strike.
We are experiencing a generational disruption. It’s very hard to go on offense when a streaming service is losing billions of dollars, CEO David Zaslav stated on the earnings conference call.
Since Warner Bros. Discovery launched its flagship streaming service Max in May, which combined content from HBO Max and Discovery+, the third quarter has been complete.
According to StreetAccount, the company reported 95.1 million global direct-to-consumer subscribers, a 700,000 drop from the prior quarter and fewer than the 95.4 million analyst projection.
During the earnings call, CFO Gunnar Wiedenfels stated that the “extraordinarily light content slate” was primarily to blame for the “modest sequential loss.”
Nonetheless, the streaming company did turn a profit during the quarter.
Warner Bros. Discovery also made progress toward debt repayment, reporting $2.4 billion in repayments for the quarter, according to the company. Its total debt is still $45.3 billion.
