Warner Bros Discovery Posts Wider-Than-Expected Loss In Q1, But Notes “Meaningful Turn” Toward Streaming Profitability
05.05.2023 - 11:45
/ deadline.com
Warner Bros Discovery matched Wall Street estimates for revenue in the first quarter, with $10.7 billion, but posted a wider-than-expected loss due to tough comparisons with the year-ago period.
Net losses reached 44 cents a share, worse than the 5-cent loss analysts had forecast and swung to the red from year-ago profit of 69 cents a share.
Streaming, though, proved a rare bright spot, posting $50 million in EBITDA after several quarters in the red. CEO David Zaslav pronounced it a “meaningful turn” in a positive direction and the company said it now expects the streaming operation to become profitable on a full-year basis in 2023, a year earlier than expected.
Streaming subscriptions, spanning HBO Max and Discovery+ rose by 1.5 million to reach 97.6 million, beating forecasts. The company had previously said direct-to-consumer streaming would break even this year and then hit the black by 2024. Later this month, HBO Max and Discovery+ are combining in a revamped service called Max. In a departure from initial plans, execs said earlier this year that Discovery+ will remain available as a stand-alone option for consumers, so the blending of services is not an all-or-nothing proposition.
The direct-to-consumer division reported quarterly revenue of $2.455 billion, while operating expenses declined 24% to $2.4 billion.
Revenue in the Studios division slid 7% to $3.2 billion, with the company citing tough comparisons with the year-earlier quarter, when it released The Batman and made a number of lucrative TV licensing deals.
The Networks division saw a 10% drop in revenue on a pro forma basis, with advertising falling 14%. The company blamed the downturn in advertising on “audience declines in domestic general