Warner Bros Discovery posts interim loss as advertising sales fall
Streaming unit remains bright spot as global subscribers rise by 2-million
09 May 2024 - 15:01
byHarshita Mary Varghese
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Bengaluru — Warner Bros Discovery reported a larger-than-expected quarterly loss, as advertising sales slumped at its cable TV unit and the studio segment struggled with the twin effects of last year’s Hollywood strikes and poor sales of a “Suicide Squad” video game.
Shares of the company were down 7% in premarket trading on Thursday, set to add to its 31.5% decline this year.
Advertising trends in the US and certain international markets have been subdued as businesses responded to the possibility of higher-for-longer interest rates, a drag for Warner Bros Discovery and other media companies.
Advertising revenue in its networks segment, which includes CNN and the Discovery Channel, fell 11% in the first quarter.
Rival Disney on Tuesday also reported a drop in its traditional TV business for the January-March period.
Warner Bros Discovery’s streaming unit remained a bright spot as global subscribers rose by 2-million to 99.6-million.
The business also reported a 72% jump in its adjusted profit — a metric closely watched by investors as they pushed companies to cut back on hefty investments and focus on profitability.
The unit reported an adjusted ebitda (earnings before interest, taxes, depreciation, and amortisation) of $86m, compared with $50m a year earlier.
Deepening its push into streaming, the company on Wednesday joined hands with Disney to offer a bundle of the Disney+, Hulu and Max streaming services in the US, starting this summer.
Studio revenue was hit by the underperformance of the game “Suicide Squad: Kill the Justice League”, compared with 2023’s top seller “Hogwarts Legacy”.
Revenue at the business fell 12%, despite March releases such as “Dune: Part Two”, which with more than $700m in worldwide box office is 2024’s highest grossing movie to date.
The company continues to face challenges posed by the twin Hollywood strikes last year, which led to production delays and fewer episodes during the first three months of the year.
Warner Bros Discovery’s revenue of $9.96bn missed analysts’ average estimate of $10.23bn, according to LSEG data.
It reported a loss of 40 US cents per share, compared with expectations for a loss of 24c.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Warner Bros Discovery posts interim loss as advertising sales fall
Streaming unit remains bright spot as global subscribers rise by 2-million
Bengaluru — Warner Bros Discovery reported a larger-than-expected quarterly loss, as advertising sales slumped at its cable TV unit and the studio segment struggled with the twin effects of last year’s Hollywood strikes and poor sales of a “Suicide Squad” video game.
Shares of the company were down 7% in premarket trading on Thursday, set to add to its 31.5% decline this year.
Advertising trends in the US and certain international markets have been subdued as businesses responded to the possibility of higher-for-longer interest rates, a drag for Warner Bros Discovery and other media companies.
Advertising revenue in its networks segment, which includes CNN and the Discovery Channel, fell 11% in the first quarter.
Rival Disney on Tuesday also reported a drop in its traditional TV business for the January-March period.
Warner Bros Discovery’s streaming unit remained a bright spot as global subscribers rose by 2-million to 99.6-million.
The business also reported a 72% jump in its adjusted profit — a metric closely watched by investors as they pushed companies to cut back on hefty investments and focus on profitability.
The unit reported an adjusted ebitda (earnings before interest, taxes, depreciation, and amortisation) of $86m, compared with $50m a year earlier.
Deepening its push into streaming, the company on Wednesday joined hands with Disney to offer a bundle of the Disney+, Hulu and Max streaming services in the US, starting this summer.
Studio revenue was hit by the underperformance of the game “Suicide Squad: Kill the Justice League”, compared with 2023’s top seller “Hogwarts Legacy”.
Revenue at the business fell 12%, despite March releases such as “Dune: Part Two”, which with more than $700m in worldwide box office is 2024’s highest grossing movie to date.
The company continues to face challenges posed by the twin Hollywood strikes last year, which led to production delays and fewer episodes during the first three months of the year.
Warner Bros Discovery’s revenue of $9.96bn missed analysts’ average estimate of $10.23bn, according to LSEG data.
It reported a loss of 40 US cents per share, compared with expectations for a loss of 24c.
Reuters
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