((Automated translation by Reuters, please see disclaimer https://bit.ly/rtrsauto))
(Redesigns at all levels)
Warner Bros. Discovery Company reported a larger-than-expected quarterly loss as advertising sales fell at its cable TV unit and the studio segment struggled with the twin effects of Hollywood’s strikes. last year and poor sales of a “Suicide Squad” video game.
The company’s WBD.O shares were down 7% in pre-market trading Thursday, expected to add to the 31.5% decline it has suffered this year.
Advertising trends in the United States and some international markets have been muted as companies react to the possibility of higher interest rates for a long time, a drag on Warner Bros. Discovery and other media companies.
Advertising revenue in the networks segment, which includes CNN and Discovery Channel, fell 11% in the first quarter.
Its rival Disney DIS.N also announced on Tuesday a decline in its traditional television business for the January-March period.
Warner Bros. Discovery’s streaming unit remained a bright spot, with subscriber numbers increasing by 2 million to 99.6 million.
The unit also posted a 72% jump in adjusted profit, a metric closely watched by investors who are pushing companies to reduce big investments and focus on profitability.
The unit reported adjusted Ebitda of $86 million, up from $50 million a year earlier.
To strengthen its presence in the streaming space, the company partnered with Disney on Wednesday to offer a bundle of the Disney+, Hulu and Max streaming services in the United States, starting this summer.
WEAKNESS OF STUDIOS
Studios’ revenue was affected by the underperformance of “Suicide Squad: Kill the Justice League” compared to “Hogwarts Legacy,” the best-selling game of 2023.
The business’s revenue fell 12%, despite March releases such as “Dune: Part Two,” which, with more than $700 million in global revenue, is the 2024 film that made the most money to date.
The company continues to face challenges posed by two Hollywood strikes last year, which led to production delays and fewer episodes in the first three months of the year.
Warner Bros. Discovery’s revenue ($9.96 billion) fell short of analysts’ average estimate ($10.23 billion), according to LSEG data.
The company reported a loss of 40 cents per share, compared to analysts’ expectations of a loss of 24 cents.
