Warner Bros Discovery reported mixed quarterly earnings before the bell on Friday showing a growing subscriber base but a wider loss during 1Q.
A bright spot was Warner Bros’ streaming unit, which swung to a $50 million profit, compared with a loss of $654 in the year-ago period and a $217 million loss in the fourth quarter of 2022.
As the group prepares for the launch of its new "Max" offering on May 23, it added 1.6 million new subscribers to its streaming services to reach a total of 97.6 million.
The media giant’s total revenue came in at $10.7 billion as compared to analyst estimates of $10.73 billion, while its loss per share missed by a wide margin at $0.44 versus the $0.05 expected by analysts and compared to a year-ago profit of $0.69 per share.
WBD also revised previous guidance, stating that it expects its U.S. direct-to-consumer business to be profitable by this year, a year ahead of its previous guidance. The company now targets $4 billion in cost-saving synergies over the next two years, up from the previous $3.5 billion.
David Zaslav, WBD's CEO, said the company is in a position "to drive free cash flow and deleverage our balance sheet," adding he remains "confident" in its strategy and ability to achieve its financial targets. WBD's streaming strategy will be crucial for the company in the crowded streaming business, with competitors such as Disney, Netflix, and Apple vying for subscribers.
The company credited the boost in 1Q subscriber net additions to recent show launches like "The Last of Us."
Shares of WBD were down around 4.4% in premarket trading Friday.
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