Warner Bros. Discovery Reports $1.5 Billion from ‘Barbie’ Despite Quarter Loss
Warner Bros. Discovery revealed a record-breaking $1.5 billion in revenue generated by the blockbuster movie “Barbie.” Despite this success, the company faced a substantial loss of $417 million for the quarter, surpassing expectations on Wall Street.
However, when considering certain adjustments for items like interest, taxes, depreciation, and amortization, the company managed to report a narrower profit. Overall, the conglomerate noted a modest 2% increase in sales, with revenue just under $2 billion for the quarter.
The remarkable success of “Barbie” at the box office helped offset a significant $235 million decline in advertising revenue within WBD’s networks unit, marking a 12% decrease. Additionally, the company faced revenue decline due to strikes by the Writers Guild of America and SAG-AFTRA, the union representing 160,000 actors, which halted most television and movie production for months. While the writers’ strike has concluded, SAG-AFTRA remains on strike, leading to ongoing negotiations between the union and various studios and streaming services.
CEO David Zaslav expressed hope for a resolution to the SAG-AFTRA strike soon. “We recognize that we need our creative partners to feel valued and rewarded, and look forward to both sides getting back to the business of telling great stories,” Zaslav said in a call with investors.
The company reported a net loss that marked an improvement from the same quarter a year earlier but was larger than the forecasted loss per share of 17 cents, exceeding the anticipated 6-cent-a-share loss by analysts surveyed by Refinitiv.
Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) demonstrated a 22% increase to nearly $3 billion. Despite the box office success of “Barbie,” profits from both networks and studio units fell.
However, Warner Bros. Discovery reported another profitable quarter from its streaming services, with adjusted EBITDA shifting to a $111 million profit compared to a $634 million loss a year ago. This turnaround in profit occurred despite a reduction of 700,000 subscribers compared to the previous year, amounting to 95.1 million subscribers worldwide. The company attributed this success to higher subscription prices and a 29% increase in advertising revenue.
While shares of Warner Bros. Discovery fell slightly in pre-market trading due to the earnings miss, the company has shown resilience and growth in its streaming service despite encountering losses in other areas.
