On Friday Warner Bros. Discovery had their turn at the mic to announce earnings for the most quarter. As with their media peers, the details showed a company struggling to limit the impact of last year’s labor strikes and steep declines in the traditional cable TV business. Advertising revenues dropped further than expected, down 14% across premium cable channels including TNT, CNN, and TBS. Results from the company’s studio division were also disappointing, off 17% from the same quarter in the previous year.
While disappointing, these results were mostly in line with expectations before earnings had been announced. What spooked investors was the decision by the company’s leaders to offer a few details on their outlook for the rest of 2024. This broke with standard practice and prompted a rapid sell-off of shares, with the price dropping 10% in a single day. The current share price of $8.59 is off 45% from where it stood only 1 year ago.
Wall Street’s poor reception came despite several encouraging signs in its earnings report. WBD’s direct-to-consumer unit, largely made up of its streaming business, generated a profit in 2023. This makes it the first major streaming platform besides Netflix to accomplish this feat. In addition, the company was able to pay down $5.4 billion of its outstanding debt, although it still has over $44 billion remaining on the books. Some optimists suggest that the company’s fundamentals look strong, and CEO David Zaslav has strategically decided to stay quiet about future projections.
See also: Warner Bros. Discovery Stock Drops as Wall Street Reacts to Earnings and Lack of Guidance (Hollywood Reporter)
