Warner Bros Discovery revenue misses as media giant posts big loss

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Pedestrians walk past a street commercial advertisement billboard from Warner Bros and DC comics character, The Batman, movie in Madrid.
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Warner Bros. Discovery on Thursday posted a large loss and recorded about $11.1 billion in fourth quarter revenue, missing analysts’ estimates, as the media industry contends with a soft advertising market. 

The company’s TV networks segment – which includes cable-TV channels like TNT, TBS and Discovery – decreased 6% to roughly $5.5 billion, as advertising revenue took a drop in particular.

Here’s what the company reported, vs. what analysts’ estimates, according to Refinitiv:

  • Revenue: $11.01 billion vs. $11.36 billion expected
  • Loss per share: 86 cents vs. 21 cents expected

The company reported a loss of $2.1 billion for the period, or 86 cents per share. Warner Bros. Discovery shares fell after hours.

Warner Bros. Discovery executives began warning of a worsening advertising market last summer, and other media companies, including Paramount Global, have seen it weigh on their earnings. Underlying advertising trends continued to soften in the fourth quarter and were exacerbated by audience declines, Warner Bros. Discovery CFO Gunnar Wiedenfels said on Thursday’s earnings call.

While Zaslav said Thursday it is a “very challenging” macroeconomic environment, he forecast an improvement later this year. “We are assuming things will get better in the second half,” Zaslav said.

The company has also been contending with restructuring costs and impairment charges stemming from the 2022 merger of Warner Bros. and Discovery, while trying to push its streaming business toward profitability. 

The company ended the fourth quarter with $45.5 billion in debt on its balance sheet, and $3.9 billion in cash on hand. A major focus for Warner Bros. Discovery has been reducing its hefty debt load and cutting costs.

Warner Bros. executives said Thursday they expected to continue significantly cutting debt from its balance sheet in the next two years. During the fourth quarter, the company repaid $1 billion in debt, and has repaid $7 billion since April, when the merger closed.

“With the major restructuring decisions behind us, this year we are focused on building and growing our businesses for the future, and we’re off to a great start,” CEO David Zaslav said in the company’s earnings release Thursday. 

The company, which owns streaming services HBO Max and Discovery+, said its global direct-to-consumer streaming subscriber base increased by 1.1 million to 96.1 million by the end of the quarter. 

Revenue for the streaming segment was up 6%, the company said Thursday, driven by an uptick in subscriber growth for its ad-supported tiers.

Losses for its streaming segment narrowed, the company said. It posted a loss of $217 million for the period, “a $511 million year-over-year improvement,” it added. 

In the spring, the company will launch its combined streaming offering, with a walk through for investors planned on April 12. The merged platform is set to be named Max, CNBC previously reported.

Earlier this month, the company hiked the monthly price of ad-free HBO Max by $1 to $15.99, the first price hike since the streamer’s launch in May 2020. The company said it would invest further in content and user experience.

Zaslav said Thursday that while plans to combine Discovery+ and HBO Max content on one platform move forward, Discovery+ will also remain as a standalone streaming service. “We have profitable subscribers that are very happy with the offering of Discovery+, why would we shut that off?” Zaslav said.

Warner Bros. Discovery reported continued softness in the advertising market, which has been weighing on its revenue since last summer, when executives first warned of a slowdown in ad spending. Last week, Paramount Global reported a decrease in quarterly revenue due to lower ad spending.

The company’s network TV segment was particularly affected as major sporting events including college football and the men’s World Cup took place on other networks during the fourth quarter.

Meanwhile, the company saw a 23% drop in revenue for its studios segment, noting it had lower TV licensing deals and fewer theatrical releases. The DC Comics film “Black Adam” was released in the fourth quarter last year, compared with multiple releases including “Dune,” “The Matrix Resurrections,” “King Richard” and “The Many Saints of Newark” in the same period during the previous year.

On Thursday, Zaslav announced Warner Bros. Discovery signed a deal to make multiple “Lord of the Rings” films, as the media company leans into its franchises.


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