Brazil – 2022/08/05: In this photo, the Warner Bros. logo. Discovery is displayed on the screen of a smartphone.
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Discovery of Warner Bros. Shares fell Wednesday after the company reported a drop in advertising revenue, a bigger-than-expected loss and lackluster streaming subscriber numbers.
Here’s what the company reported for the quarter ended September 30, compared to analyst estimates, according to LSEG, formerly known as Refinitiv:
- Loss per share: 17 cents versus 6 cents expected
- Income: $9.98 billion versus $9.98 billion expected
Warner Bros. Discovery reported a third-quarter net loss of $417 million, or 17 cents per share, down from the $2.31 billion loss the company reported in the same quarter last year , or 95 cents per share.
The fall in the company’s shares follows a media rally late last week driven by Roku And Primordial earnings. Rival media giant Disney is expected to report results after the closing bell on Wednesday.
Warner Bros. Discovery has warned of a number of hurdles heading into 2024, including weak advertising revenues and lingering impacts from the actors’ strike.
“It’s a generational upheaval that we’re going through. Faced with that with a streaming service losing billions of dollars, it’s really difficult to go on the offensive,” CEO David Zaslav said during the conference call on the results. “It is difficult to manage interest rates as they are in the face of advertising challenges in the market.”
Advertising revenues in the networks segment fell 12% from a year earlier, reflecting lower viewership of general entertainment and news programming, as well as soft advertising trends in the United States, a indicated the company.
This quarter marks 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 direct-to-consumer subscribers worldwide, down 700,000 from the previous quarter and lower than analysts’ projection of 95.4 million subscribers, according to StreetAccount.
The “modest sequential loss” is largely the result of an “extraordinarily light slate,” Chief Financial Officer Gunnar Wiedenfels said on the earnings conference call.
The streaming business, however, generated profits during the quarter.
Warner Bros. Discovery also made progress in paying down its debt, with $2.4 billion in repayments made during the quarter, the company said. It still has gross debt of $45.3 billion.