Warner Bros Discovery faced a significant market downturn in premarket trading on Friday, with its stock plunging nearly 9% after the company unveiled disappointing fourth-quarter (Q4) financial results.
At the time of this publication, Warner Bros Discovery Inc stock (WBD) has witnessed a decline.
Warner Bros Discovery Inc
Current Price: $8.50
Change : -1.06
Change (%): (-11.09%)
Volume: 58.7M
Source: Tomorrow Events Market Data
Warner Bros Discovery Q4 Results: The media giant reported a wider-than-expected loss and revenue that fell short of analyst estimates, attributing the underperformance to sluggish advertising revenue and the fallout from recent strikes within the entertainment industry.
Despite efforts to bolster its direct-to-consumer (DTC) business, Warner Bros Discovery still fell short of Wall Street’s expectations. While losses in the DTC segment narrowed on an adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) basis, the company failed to meet analyst projections on this metric. The company’s flagship streaming service, Max, alongside other offerings, struggled to achieve profitability, posting a fourth-quarter adjusted EBITDA loss of $55 million. Although this marked a notable $162 million improvement from the previous year, it fell significantly short of the $20 million in positive adjusted EBITDA anticipated by analysts.
Despite the challenges, Warner Bros Discovery reported a total of 97.7 million streaming subscribers, reflecting the continued demand for its content in the digital sphere.
Overall, the company reported a net loss of $400 million for the quarter, or 16 cents per share, showing improvement from the loss of $2.101 billion, or 86 cents per share, recorded in the same period the previous year. However, revenue dipped to $10.8 billion from $11 billion, missing the FactSet consensus of a loss of 10 cents per share and revenue of $10.3 billion.
The decline in revenue was particularly pronounced in the studio and network segments, with studio revenue plummeting by 18% excluding the impact of foreign exchange, and network revenue dropping by 8%. Advertising revenue took a hit, falling by 14%, primarily due to diminishing audiences in domestic general entertainment and news networks, as well as the fallout from the exit of the AT&T SportsNet business.
As Warner Bros Discovery grapples with these challenges, investors will be closely monitoring its strategies to revitalize its DTC business and navigate the evolving landscape of the media industry.
