Warner Bros. Discovery (WBD) is set to report third quarter earnings after the bell on Thursday after the company swung to a $3.42 billion loss in the second quarter amid consolidation challenges.
Here’s what Wall Street expects, according to Bloomberg consensus estimates:
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Revenue: $10.37 billion expected
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Adj. loss per share: -$0.17 expected
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Total DTC subscribers: 3.27 million net additions expected
Increased restructuring charges, macroeconomic challenges like foreign exchange headwinds, further subscribers losses in linear television, and a slowdown in advertising are widely expected to pressure profits in the quarter.
Wall Street estimates that third quarter TV ads could fall by high-single or low-double digits, while affiliate fees are also expected to decline amid increased cord cutting.
One silver lining could be increased subscriber growth after “House of the Dragon” delivered record-breaking viewership numbers in the third quarter. 3 million net additions are expected (versus 1.7 million in Q2), while management has guided a long-term target of 130 million paying users by 2025.
Profitability continues to remain a top concern for investors as faith in streaming fundamentals wanes. The company said it expects 2022 adjusted EBITDA to come in between $9 billion and $9.5 billion, a decline from previous forecasts of $10 billion. Management also cut its full-year 2023 EBITDA guidance from $14 billion to $12 billion.
Warner Bros. Discovery stock has fallen 49% year-to-date and is down ahead of earnings.
The company’s broader restructuring efforts are also a factor: The streaming giant looks to slash $3 billion worth of costs over the next two years and prepares to combine HBO Max with Discovery+.
Warner Bros. Discovery initiated yet another round of layoffs last month, including the television studio reportedly cutting 26% of its headcount (125 positions) across its scripted, unscripted, and animation divisions — laying off 82 staffers and opting not to fill an additional 43 vacant positions.
The company also shuttered its digital production arm Stage 13 and the 40-year-old Warner Bros. Television Workshop, a long-standing pioneer in fostering new and diverse talent.
Alexandra is a Senior Entertainment and Media Reporter at Yahoo Finance. Follow her on Twitter @alliecanal8193 and email her at alexandra.canal@yahoofinance.com
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