Earnings Report for Warner Bros. Discovery (WBD) in the First Quarter of 2024

Warner Bros. Discovery reported its first-quarter results on Thursday, and the numbers didn’t quite meet analysts’ expectations. Despite strong performance in its streaming unit, the company fell short on both the top and bottom lines. The stock managed to gain 3% on Thursday, showing some resilience in the face of the disappointing results.

In terms of the specifics, Warner Bros. Discovery reported a loss per share of 40 cents, missing the expected 24 cents loss. Revenue also fell short, coming in at $9.96 billion versus the anticipated $10.231 billion. The company attributed the decline in revenue to a 7% drop compared to the same quarter last year.

However, it wasn’t all bad news for Warner Bros. Discovery. The company did manage to reduce its net loss to $966 million, or 40 cents per share, which marked an improvement from the prior year. Total adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) were down approximately 20% to $2.1 billion, with the company noting lower revenue from its Suicide Squad: Kill the Justice League video game.

On the streaming front, Warner Bros. Discovery saw some positive growth. The company added 2 million direct-to-consumer streaming subscribers during the quarter, bringing its total to 99.6 million. The streaming segment earned an adjusted $86 million, up $36 million from the previous year. Advertising revenue for streaming also saw a significant boost, increasing by 70% thanks to higher engagement on Max in the U.S.

In a strategic move, Warner Bros. Discovery announced a partnership with Disney to bundle their streaming services, which includes Max, Disney+, and Hulu. The bundled offering will be available to consumers this summer at a discounted price, in an effort to combat the ongoing decline in traditional pay TV subscriptions.

The company also touched on its sports rights negotiations, particularly with the NBA. Warner Bros. Discovery is hopeful to reach an agreement with the NBA while expanding its Max streaming service to more European markets ahead of the Summer Olympics in Paris.

Despite challenges in its TV networks and studios segments, Warner Bros. Discovery remains focused on returning the luster to its film studio. The company announced plans for a new installment of the Lord of the Rings franchise, slated for release in 2026.

Overall, Warner Bros. Discovery is making efforts to reduce its debt load, with a current debt standing at $43.2 billion. The company repaid $1.1 billion in debt during the quarter and announced a $1.75 billion cash tender aimed at further reducing its debt.

In conclusion, Warner Bros. Discovery’s first-quarter results may not have met expectations, but the company is actively working on strategic initiatives to drive growth and address its debt levels. The partnership with Disney and focus on streaming and content creation are key components of its strategy moving forward.

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