Warner Bros Discovery Inc (NASDAQ:WBD) reported lower revenues and higher losses than expected for the first quarter, though subscriber numbers for its streaming subscribers were higher than predicted.
Boosted by Dune 2 and Godzilla x Kong, its Warner Bros Pictures arm had a strong start too, being the first studio to top $1 billion in both overseas and global box office in the quarter.
Total revenues came to $9.96 billion in the first three months of 2024, a decrease of 7% compared to a year earlier and below the $10.3 billion Wall Street analysts consensus.
A net loss per share of $0.40 was down on $0.44 a year ago and worse than the $0.22 average forecast.
The company cited the success of Hogwarts Legacy in the prior year while Suicide Squad: Kill the Justice League generated "significantly lower revenues in the current year quarter". Dune 2 is however the top-grossing box office film worldwide this year, having grossed over $700 million worldwide.
Global streaming subscribers rose to 99.6 million at the end of Q1, an increase of 2.0 million subscribers over the quarter, while average revenue per user was up 4%.
"We delivered meaningful growth in our streaming business with a nice acceleration in ad sales, generating nearly $90 million in positive EBITDA for the quarter," said president and CEO David Zaslav.
The Max streaming service, formerly referred as HBO Max, will soon be rolling out to 29 countries across Europe, Zaslav said, backed by its "strongest ever" content lineup over the coming year.
He has high hopes for the Warner Bros Pictures studio slate this year, which includes new sequels to Mad Max, Beetlejuice (pictured below), Joker and Lord of the Rings, plus a new Kevin Costner western, Horizon, and two films from the Night Shyamalan family, Trap from father M and The Watchers directed by his daughter, Ishana.
Zaslav highlighted strong free cash flow of $390 million in the group's seasonally weakest cash quarter, with $1.1 billion of debt repaid to leave $43.2 billion of gross debt still standing.
"We continue to make bold moves to transform our company for the future as we position ourselves to take full advantage of the opportunities ahead," he said.
The shares fell 3.6% to $7.55 in pre-market trading.