Key Takeaways
- Warner Bros. Discovery shares cratered as the entertainment company reported TV revenue and streaming subscribers declined.
- The company said TV advertising sales fell because of drop in viewership and a “soft” ad market.
- Subscribers to HBO, Max, and Discovery+ slid by 700,000 from the previous quarter.
Warner Bros. Discovery (WBD) was the worst-performing stock in the S&P 500 in early trading Wednesday as shares tumbled over 15% after the media giant posted a drop in ad sales at its TV networks and lost direct-to-consumer service subscribers.
The owner of CNN, HGTV, Max, Discovery+, and Warner Bros. studio reported a third quarter fiscal 2023 loss of $0.17 per share, nearly triple expectations. Revenue was up 1.6% from a year ago to $9.98 billion, also short of forecasts.
Advertising revenue at its Networks segment tumbled 12% to $1.71 billion, which the company indicated was mostly because of “audience declines in domestic general entertainment and news networks and soft advertising markets mainly in the U.S. and, to a lesser extent, certain international markets.”
Subscribers to its HBO, Max, and Discovery+ services totaled 95.1 million, a decline of 700,000 from the previous quarter. Ad sales jumped 30%, mainly driven by Max U.S. ad-lite subscriber growth and higher engagement per subscriber.
Studio revenue rose 4% to $3.23 billion, boosted by the success of the blockbuster “Barbie” movie. However, gains were held back by the impact of the strikes by Hollywood writers and actors.
Even with Wednesday’s declines, shares of Warner Bros. Discovery were still up slightly for 2023.
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