Photo by Chase Yi on Unsplash
Even ‘Barbie’ Couldn’t Help Warner Bros. Discovery Beat Q3 Forecasts
November 8, 2023
Warner Bros. Discovery, the media conglomerate resulting from the merger of WarnerMedia and Discovery, has announced its third-quarter earnings. Though CEO David Zaslav is pleased with the results, the company still didn’t quite beat revenue forecasts.
On the downside, Warner Bros. Discovery lost 700,000 global subscribers this quarter, ending with 95.1 million subscribers in total for its streaming platforms Max and Discovery+, which is less than the 95.4 million that analysts predicted. The company also reported a net loss of $417 million in Q3, and ad revenue for its TV networks segment “fell 12% compared to a year earlier,” according to CNBC.
Warner Bros. Discovery reported $9.979 billion in total revenues, which didn’t quite meet Wall Street’s forecast of $10.04 billion, as noted by Yahoo Finance. One reason for this could have been the company’s lack of TV content due to the actors’ and writers’ strikes.
Even with these slightly low numbers compared to expectations, there were still some good results as well, and Zaslav spoke positively about the quarter. He said, “I am very pleased with the strong financial results that our company delivered in Q3, underscored by 22% growth in Adjusted EBITDA and over $2 billion in free cash flow, putting us on track to meaningfully exceed $5 billion for the year and contributing to our nearly $12 billion in debt paydown to date. Our Direct-to-Consumer business had another profitable quarter with $111 million of Adjusted EBITDA and launched its new live-programming offerings with CNN Max and the Bleacher Report Add-On, which are showing early signs of contributing to increased engagement and lower churn on Max.”
The biggest success of the quarter was the blockbuster “Barbie” movie, which generated almost $1.5 billion worldwide, making it the highest-grossing film in the history of Warner Bros. However, it still wasn’t enough to help the company beat forecasts.
After Warner Bros. Discovery shared its quarterly results and warned of obstacles heading into 2024, including impacts from the Hollywood strikes and the sluggish ad revenue, “shares fell by close to 16% in morning trading,” according to CNN.
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