The Warner Bros
Warner Bros. Discovery Inc. faced a significant setback as its shares plummeted to their lowest level since the stock’s inception in April 2022. The entertainment giant reported fourth-quarter revenue and profits that fell short of Wall Street expectations, primarily attributed to declining TV advertising sales and weaknesses in its studios business.
Revenue for the quarter stood at $10.3 billion, marking a 7% decline from the same period last year, falling short of analysts’ projections of $10.5 billion. Notably, advertising revenue in the TV networks division dropped by 12% to $1.9 billion, while revenue at its film and TV studios declined by 18% to $3.2 billion compared to the previous year.
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Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) totaled $2.5 billion, falling short of estimates for $2.8 billion. The company reported a loss of 16 cents per share, which was more significant than anticipated. Analysts also expressed concern over the absence of earnings guidance for the upcoming year.
As of 12:23 p.m. in New York, shares were down by 9.3% to $8.68, with a low of $8.25 earlier in the trading session.
Warner Bros., which owns CNN, TNT, and other networks, has been grappling with the shift in TV viewing habits from traditional channels to streaming services. The disruptions caused by strikes among Hollywood writers and actors further exacerbated the challenges faced by the company.
David Zaslav, Chief Executive Officer of Warner Bros. Discovery Inc., acknowledged the difficulties during an earnings call, stating, “This business is not without its challenges… We are challenging our leaders to find innovative solutions.”
To diversify revenue streams, the company has been selling more programs to streaming platforms like Netflix Inc. Additionally, the acquisition of Turkish streaming service BluTV contributed 1.3 million subscribers to the company’s direct-to-consumer base, which totaled 97.7 million, surpassing analysts’ estimates of 96 million.
Despite the challenges, the company’s streaming business, including the HBO channel, remained profitable for the full year.
