Warner Bros Discovery Inc (NASDAQ:WBD) reported a higher-than-expected 3Q loss as the ongoing Hollywood strike and weaker advertising revenue hit the entertainment company’s bottom line.
Its direct-to-consumer division, however, stood out with a surprise profit from its flagship brand Max.
The unit reported adjusted earnings of $111 million before taxes compared to the expected loss of $125 million forecast by the Street.
However, subscribers declined by 700,000, partially due to Warner Bros’ move to combine Discovery+ steaming content with Max.
Overall, though, the parent company reported a loss of $0.17 per share in the three months ended September, versus an expected loss of $0.08.
On an adjusted basis, the company reported a profit of $2.97 billion, also beating Wall Street expectations of $2.89 billion.
Warner Bros’ box office smash Barbie, which is now the highest grossing film in the company’s history, helped offset weak advertising at the company’s traditional TV networks.
Revenue of $9.98 billion was in line with the consensus estimate of $9.98 billion, according to data compiled by Bloomberg.
Shares of Warner Bros were down nearly 14% in early Wednesday trading in New York.