In this photo illustration, Warner Bros. The Discovery logo is displayed on the smartphone screen.
Rafael Henrique | SOPA photos | Light Rocket | Getty Images
Warner Bros. Discovery The company reported third-quarter earnings Thursday, missing analyst expectations, as it felt the effects of a tough advertising environment and costs associated with its post-merger restructuring.
Here’s what the company had compared to analysts’ expectations, according to Refinitiv:
- he won: $9.82 billion vs. $10.36 billion expected
The company reported a loss per share of 95 cents, citing macroeconomic headwinds, particularly in advertising.
Shares were down about 2% after hours Thursday, after dropping 5.6% to $11.97 during the regular trading session.
Warner Bros. The discovery is the result of a merger between WarnerMedia and AT&T’s Discovery, which was completed earlier this year. Since the merger was completed, the company has been in the midst of significant cost-cutting measures, such as laying off employees and pulling content from streaming service HBO Max.
“While we have a lot of work to do and there are some tough decisions still to be made, we are fully convinced of the opportunity ahead,” CEO David Zaslav said in the company’s statement Thursday.
Later, on an earnings conference call, he added, “Indeed, we see this as a meaningful opportunity, one we’ve taken wholeheartedly to look inside each of our businesses and see what works, what doesn’t, is it properly structured, and does it get appropriate resources.
Last year, Warner Bros. Discovery’s valuation was nearly halved as Wall Street lowered its forecast for global streaming subscriber growth. Streaming services are vying for subscribers, with industry giant Netflix losing customers earlier this year and unveiling an ad-supported tier at a cheaper cost.
The company said it added 2.8 million direct-to-consumer customers in the third quarter, bringing its total global subscribers to 94.9 million. Revenue from the direct-to-consumer segment fell 6% to $2.3 billion, as it saw a decline in licensing and distribution revenue.
In late October, the company said in public filings that it estimated it would book $1.3 billion to $1.6 billion in pre-tax restructuring fees during the third quarter. The restructuring is expected to be largely complete by the end of 2024, and will incur approximately $3.2 billion to $4.3 billion in total pre-tax restructuring charges.
Meanwhile, the slowdown in advertising has been hitting media companies.
Revenue in the network television segment fell 8% to $5.2 billion. The sector was particularly affected by the 11% drop in advertising revenue.
Industry peer Paramount Global reported earnings on Wednesday, and it also missed analyst estimates as television and advertising revenue fell.
This is an evolving story. Check back for updates.