The impact of the then-dual Hollywood writers and actors strike during the third quarter will be in focus when Warner Bros Discovery Inc (NASDAQ:WBD) hands down its latest quarterly earnings report on Wednesday, November 8, after the closing bell in New York.
In early September, the media company lowered its full-year profit outlook due to the strikes from a range of $11 billion to $11.5 billion to a range of $10.5 billion to $10 billion.
It also warned that its adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) will be negatively impacted by about $300 million to $500 million.
As such, investors will be eyeing the company’s results to see how much of this projected impact was felt during 3Q and if the company will again lower its full-year guidance as the actors’ strike drags on.
However, as the company’s profits are expected to take a hit, its free cash flow is expected to benefit as projects are put on hold due to the strikes.
The highly anticipated sequel Dune: Part Two was delayed from November 2023 to March 2024 and an animated Lord of the Rings film slated for April next year has been pushed back to December 2024.
For 3Q, Warner Bros said it expects to generate free cash flow in the $1.7 billion ballpark, in line with the second quarter, and for the full year raised its free cash flow guidance to $5 million.
It said it expects to see “sequentially larger savings” as the result of the strikes as well as the success of the Barbie movie during 3Q.
In terms of its 3Q earnings, Wall Street analysts have pegged a loss per share of $0.08 on revenue of $9.97 billion, compared to earnings per share of $0.17 per share and revenue of $9.82 billion in the year-ago quarter.
The company’s streaming numbers will also draw investors' attention after the company reported a larger-than-expected loss of 1.8 million subscribers during 2Q.
Shares of Warner Bros added 4.1% at US$9.94 on Monday afternoon.
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