Warner Bros. Discovery sank 9% as markets opened Friday morning following the company’s Q4 earnings report that showed financial progress for the Max streaming service but weakness in key areas including advertising sales.
Warner Bros. Discovery shares were down 9% in pre-market by the end of the company’s hourlong conference call with Wall Street analysts. Shares closed Thursday at $9.56 and were down to around $8.75 shortly after 9 a.m. ET. The stock was down 10% after just two minutes of formal trading as markets opened at 9:30 a.m. ET.
WB Discovery CEO David Zaslav sought to reassure analysts during the call that the long-term outlook for the company remains strong. He emphasized that the new regime that took over in April 2022 is still working through issues that they inherited. Revenue for the quarter was down 7% — partly due to lost TV revenue from last year’s strike-induced production delays — while adjusted earnings were down 5%, dragged down by a 30% adjusted EBITDA loss at the Warner Bros. studio and an 11% decline for the linear networks group that is home to CNN, TNT, Discovery, Food Network, HGTV and other channels. The streaming unit that houses Max delivered a $55 million adjusted EBITDA loss, which marked a $162 million year-over-year improvement from the unit’s performance in Q4 2022.
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“We worked really hard to get ourselves a healthy balance sheet, to pay down debt, to get below four times leverage, to really focus on on where we’re on where we’re spending money and on driving free cash flow,” Zaslav said. “And so we’ve positioned this company really now as being a healthy company and with a great leadership team with a lot of direction.”
WB Discovery shares are down 18% for the year to date and down 46% for the past 12 months.
