Warner Bros. Discovery nosedives on weak advert commentary
Warner Bros. Discovery (WBD) inventory fell greater than 15% in early buying and selling Wednesday after the corporate famous ongoing weak point within the advert market, saying it might influence visibility for 2024.
CFO Gunnar Wiedenfels mentioned on the corporate’s post-earnings convention name that 2024 “can have its share of complexity, notably because it pertains to the potential for continued sluggish advert traits.”
He added that “it’s unlikely from at present’s perspective that we’ll hit our goal leverage vary by the tip of 2024 with out a significant restoration of the TV advert market.”
WBD, like different media corporations, has grappled with an unfavorable advert surroundings. Earlier this summer time, the corporate mentioned it might realign its promoting gross sales division, together with its management group, amid that weak advert demand.
Network promoting income tumbled by 13% in Q3 from the year-earlier interval, matching the drop seen in Q2.
The firm posted a lack of $0.17 a share within the third quarter, wider than the lack of $0.08 a share analysts had anticipated however an enchancment from the prior 12 months’s lack of $0.95. Revenue of $9.98 billion got here in on par with consensus estimates compiled by Bloomberg and elevated 1% excluding overseas trade (FX) in comparison with Q3 2022.
Free money movement jumped to over $2 billion, stronger than analysts anticipated, largely resulting from decrease content material spending from the Hollywood strikes and continued post-merger synergies.
The firm’s complete streaming subscribers for the third quarter have been 95.1 million, a lower of 700,000 international subscribers for the reason that finish of the second quarter. Streaming losses, nevertheless, reversed with WBD reporting direct-to-consumer (DTC) adjusted EBITDA of $111 million within the third quarter, a $745 million year-over-year enchancment.
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