The company’s TV network segment, which includes channels like Discovery, TBS, and TNT, which downslide 6%, roughly amounting to $5.5 billion, as advertising revenue fell sharply.
Here’s what the company reported versus what analysts predicted, according to Refinitiv:
- Revenue: $11.01 billion vs. $11.36 billion expected
- Loss per share: 86 cents vs. 21 cents expected
Altogether, the company reported a loss of $2.1 billion for the interval, or 86 cents per share. According to reports, Warner Bros. Discovery shares fell after hours.
However, after a period, Warner Bros. Discovery executives were alerted to the worsening advertising market last summer, as were other media firms, including Paramount Global, as they noticed a weight on their yields.
Gunnar Wiedenfels, CFO of Warner Bros. Discovery, said on Thursday’s earnings call that “Underlying advertising trends continued to alleviate in the fourth quarter and were intensified by audience declines.”
While David Zaslav, CEO of Warner Bros. Discovery, said on Thursday that it is a “very challenging” macroeconomic environment, he also estimated an improvement later this year.
“We are assuming things will get better in the second half,” Zaslav said.
The company has also been battling with revamping costs and detriment charges restraining from the 2022 merger of Warner Bros. and Discovery, while trying to push its surging business in the right direction.
The company concluded its fourth quarter with $45.5 billion in debt, and $3.9 billion in affluence. At this point in time, Warner Bros. Discovery’s major concern is reducing its hefty debt load through cost cutting.
On Thursday, Warner Bros. executives said they expected to continue essentially cutting debt from its balance sheet in the next two years. During the fourth quarter, the company repaid $1 billion in debt, and has repaid $7 billion since April 2022, when the merger dissolved.
“With the major restructuring decisions behind us, this year we are focused on building and growing our businesses for the future, and we’re off to a great start,” Zaslav said in the company’s earnings release on Thursday.
The company, which owns streaming networks like HBO Max and Discovery+, said its worldwide direct-to-consumer streaming subscriber base had increased from 1.1 million to 96.1 million by the end of the quarter.
Further, the company said on Thursday that revenue for the streaming segment was up 6%, which was typically driven by an uptick in subscriber growth for its ad-supported tiers.
Later, the company stated that losses for its streaming segment narrowed. It recorded a loss of $217 million for the interval “and a $511 million year-over-year improvement,” it added.
In the upcoming spring season, the company will launch its integrated streaming offering, with a walkthrough for investors, which has been planned for April 12. The merged platform is set to be named Max, the company said.
However, earlier in this month, the company hiked the monthly price of ad-free HBO Max from $1 to $15.99, which was reported as the first price hike since the streamer’s launch in May 2020. Moreover, the company said it would invest in magnifying content and in a realistic user experience.
Zaslav said that while he plans to combine Discovery+ and HBO Max content on a single platform to give it a boost, Discovery+ will remain a discrete streaming service.
“We have profitable subscribers that are very happy with the offering of Discovery+, why would we shut that off?” Zaslav said in a statement.
Besides, the Warner Bros. TV segment was specifically affected as major sporting events, including college football and the men’s World Cup, took place on other channels, capturing the attention of the users during the Q4.
Noticing significant gains of several other networks that exhibit various studio segments, such as theoretical release, which is a DC comic film titled “Black Adams,” which was released in the fourth quarter on a different network and quickly increased its overall earnings and subscriber count when compared to the previous year.
Looking at this, “Warner Bros. Discovery signed a deal to make several “Lord of the Rings” films, as the media company leans into its franchises,” announced by Zaslav on Thursday’s release.
- Published By Team Genuine Reporter