Editor’s Note: This post is breaking and will be updated
Warner Bros. Discovery (WBD) reported its first quarterly report since the $43 billion merger as the company battles consolidation challenges.
The media conglomerate swung to a $3.42 billion loss in the second quarter, partly due to charges related to its recent merger. The stock plummeted in after-hours trading, down as much as 9%.
Here are Warner Bros. Discovery second quarter results compared to Wall Street’s consensus estimates, as compiled by Bloomberg:
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Revenue: $9.82 billion versus $11.91 billion expected
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Adj. profit/loss per share: -$1.50 versus $0.08 expected
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Total DTC subscribers: 1.7 million net additions versus 1.65 million net additions expected
In total, the company said it ended the second quarter with 92.1 million subscribers across its streaming platforms, up about 1.7 million from the first quarter.
“We have the most powerful creative engine and bouquet of owned content in the world, as highlighted by our industry leading 193 Emmy nominations, and we intend to maximize the value of that content through a broad distribution model that includes theatrical, streaming, linear cable, free-to-air, gaming, consumer products and experiences, and more, everywhere in the world,” David Zaslav, WBD President & CEO said in a statement.
“We’re confident we’re on the right path to meet our strategic goals and really excel, both creatively and financially, and couldn’t be more excited about the future of our company,” he continued.
Analysts anticipate messy quarters to come as the streaming conglomerate works to integrate the two businesses, drive free cash flow, and deleverage its balance sheet.
Guidance calls for a $300 million profit hit in 2022, largely due to underperformance on the Warner side.
On the earnings call, investors will want greater clarity on the platform’s direct-to-consumer streaming strategy, in addition to the confirmed combination of HBO Max and Discovery.
Warner Bros. Discovery previously said it expects to slash $3 billion worth of costs over the next two years, and distribute those savings into streaming content.
Nevertheless, the company announced new programming updates that suggest the merger will not happen any time soon with the two streaming services remaining separate entities, for now.
Just prior to Thursday’s earnings results, the media giant revealed that select programming from Chip and Joanna Gaines’ Magnolia Network will arrive on HBO Max in September. It will remain available on Discovery+, as well.
Additionally, CNN will receive its own hub on Discovery+ that will include original series like “Stanley Tucci: Searching for Italy” and “Anthony Bourdain: Parts Unknown.”
Earlier on Wednesday, the studio confirmed that two films slated for an HBO Max release — “Batgirl,” starring “In The Heights” star Leslie Grace, as well as “Scoob!: Holiday Haunt” — have been pulled.
Warner Bros. did not immediately respond to Yahoo Finance’s request for comment on the layoff reports or its decision to pull those two movies, but did provide a statement to CNN, which it owns.
“The decision to not release ‘Batgirl’ reflects our leadership’s strategic shift as it relates to the DC universe and HBO Max,” a Warner Bros. spokesperson told the network.
“Leslie Grace is an incredibly talented actor and this decision is not a reflection of her performance,” the statement continued. “We are incredibly grateful to the filmmakers of ‘Batgirl’ and ‘Scoob! Holiday Haunt’ and their respective casts and we hope to collaborate with everyone again in the near future.”
The DC Comics film was nearly complete and cost the studio a reported $70 million to 90 million to produce.
As investors digest the recent cost-cutting headlines, critics were quick to point out the sky-high pay of CEO David Zaslav.
According to regulatory filings, Zaslav’s 2021 compensation package — which runs through the end of 2027 — jumped to a whopping $246 million, significantly higher compared to 2020 ($37.7 million) and 2019 ($45.8 million).
Alexandra is a Senior Entertainment and Food Reporter at Yahoo Finance. Follow her on Twitter @alliecanal8193 and email her at alexandra.canal@yahoofinance.com
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