Warner Bros Discovery Inc (NASDAQ:WBD) sank in aftermarket trading after posting a 4Q earnings miss on weaker advertising revenue and a slowing subscriber base.
The entertainment giant, which is behind movie studios like DC and television networks HBO, CNN and Discovery, reported revenue of $11.01 billion against analyst expectations of $11.23 billion for the three-month period ending December 31, 2022.
Adjusted EBITDA came in at a loss of $0.83 compared to an expected loss of $0.13 for the same period.
Meanwhile, the group's subscriber numbers missed expectations, with 96.1 million versus 96.3 million anticipated by analysts.
Studios revenues were $3.84 billion, a decrease of 23% compared to the prior year quarter on a pro forma combined basis. The firm attributed the decrease to lower TV licensing, and to a lesser extent, lower games and home entertainment revenues, according to its results statement.
On the Networks side, revenue sank by 6% to $5.51 billion as its advertising revenue decreased by 14%, which Warner Bros Discovery said was “driven by audience declines in domestic general entertainment networks and soft advertising markets mainly in the US.”
Executives at Warner Bros Discovery will look to its suite of current programming, such as the popular water cooler show The Last of Us airing on HBO, to drive results higher in 1Q 2023.
“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 a statement.
“We're seeing strong momentum across the enterprise, including our exciting long-term plans for DC Studios, the historic success of our latest HBO series The Last of Us, the significant financial and operating gains in DTC, and the record sales of our newest game Hogwarts Legacy. And with our unparalleled portfolio of assets and IP, a growing roster of exceptional creative talent, and some of the buzziest storytelling in the industry, we believe we have repositioned our businesses to take full advantage of the many opportunities ahead.”
Shares of Warner Bros Discovery were down over 5% in afterhours trading at $14.90.
Contact Angela at angela@proactiveinvestors.com
Follow her on Twitter @AHarmantas