Warner Bros Discovery (WBD) 4Q22

Pedestrians stroll previous a road billboard from the Warner Bros and DC comedian guide character The Batman in Madrid.

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Warner Bros. Discovery posted an enormous loss on Thursday, posting income of about $11.1 billion within the fourth quarter, lacking analysts’ estimates because the media trade grapples with a weak promoting market.

The corporate’s TV Networks phase — which incorporates cable TV networks like TNT, TBS, and Discovery — declined 6% to about $5.5 billion, notably on account of declining promoting income.

Right here’s what the corporate reported in comparison with analyst estimates, in accordance with Refinitiv:

  • Income: $11.01 billion versus $11.36 billion anticipated
  • Loss per share: 86 cents versus 21 cents

The corporate reported a lack of $2.1 billion, or 86 cents a share, for the interval. Warner Bros. Discovery shares fell after the shut of enterprise.

Warner Bros. Discovery executives started warning of a deteriorating promoting market final summer time, and different media corporations, together with Paramount World, have seen it harm their earnings.

The corporate is grappling with restructuring prices and impairments stemming from the 2022 merger of Warner Bros. and Discovery because it tries to maneuver its streaming enterprise towards profitability.

The corporate ended the fourth quarter with $45.5 billion in debt on its stability sheet and $3.9 billion in money. A key focus of Warner Bros. Discovery was decreasing its excessive debt burden and slicing prices.

“Having made the key restructuring selections behind us, this yr is our concentrate on constructing and rising our companies for the long run, and we’re off to an amazing begin,” CEO David Zaslav stated within the firm’s earnings launch on Thursday.

The corporate, which owns streaming companies HBO Max and Discovery+, stated its international direct-to-consumer streaming subscriber base grew by 1.1 million to 96.1 million by the top of the quarter.

Income for the streaming phase rose 6%, the corporate stated Thursday, pushed by a surge in subscriber progress for its ad-supported tiers.

Losses for its streaming phase narrowed, the corporate stated. It posted a lack of $217 million for the interval, “a $511 million enchancment from a yr in the past,” it added.

Warner Bros. Discovery reported continued weak point within the promoting market, which has weighed on its earnings since final summer time, when executives first warned of a slowdown in advert spending. Final week, Paramount World reported a decline in quarterly income because of decrease advert spend.

The corporate’s community TV phase was notably affected as main sporting occasions comparable to school soccer and the lads’s World Cup occurred on different networks in the course of the fourth quarter.

In the meantime, the corporate noticed its studio phase’s income decline 23% and located it had fewer TV licensing offers and fewer theatrical releases. The DC Comics movie Black Adam was launched within the fourth quarter of final yr, in comparison with a number of releases together with Dune, The Matrix Resurrections, King Richard and The Many Saints of Newark throughout the identical interval throughout the identical interval earlier yr.

That is an evolving story. Examine for updates once more.