Warner Bros. Discovery Reports Narrowed Loss Despite Industry Challenges
Warner Bros. Discovery, facing ongoing challenges in the media industry, revealed a significantly reduced loss in the final quarter of 2023 compared to the same period the previous year. However, the company’s loss was wider than analysts had anticipated.
The media conglomerate, which boasts CNN among its assets, reported a net loss of $400 million for the quarter, a notable improvement from the $2.1 billion loss recorded in the corresponding quarter of the previous year. Despite this progress, the loss per share of 16 cents fell short of expectations, which had forecasted a loss of 10 cents per share.
Revenue for the quarter dipped by 7% year-over-year to $10.3 billion, slightly below analysts’ forecasts.
Company executives expressed satisfaction with efforts to reduce debt, highlighting the payment of $1.2 billion in debt during the quarter. This brought the company’s gross debt down to $44.2 billion, a $12 billion decrease since the merger of Discovery and Warner Media in 2022.
CEO David Zaslav acknowledged the company’s improved financial health but also acknowledged ongoing challenges, including the loss of revenue from cord-cutting consumers and declining ad revenue.
Advertising revenue in the network segment declined by 14% to $1.9 billion, while revenue from subscriber fees fell by 3% to $2.8 billion. Despite these headwinds, the network segment still generated operating earnings of $2.2 billion, although this represented an 11% decrease.
The company’s streaming services reported a 3% increase in sales but posted an operating loss of $55 million, attributed in part to a lack of new content due to strikes by writers and actors in the previous year.
Despite challenges, global subscribers reached 97.7 million, showing a 2% increase from the previous quarter and a 1% increase year-over-year. However, domestic streaming subscribers declined to 52 million, down 1% from the previous quarter and 5% year-over-year.
Following the earnings report, shares of Warner Bros. Discovery dropped approximately 12% in morning trading. The stock has seen a decline of over 25% since the beginning of the year and 46% over the last 12 months.
