Warner Bros. Discovery's Q1 Revenue Drops as Audience and Market Challenges Persist
Portfolio Pulse from Anusuya Lahiri
Warner Bros. Discovery, Inc (NASDAQ:WBD) reported a Q1 revenue decline of 7% year-on-year to $9.96 billion, missing the consensus of $10.23 billion. The company experienced a net loss of $966 million, with an EPS loss of $(0.40), failing to meet the expected loss of $(0.23). Adjusted EBITDA fell 20% due to lower revenues from Suicide Squad: Kill the Justice League compared to Hogwarts Legacy's success in the previous year. Studios and Networks revenues declined due to strikes and the exit from AT&T SportsNet, while DTC revenues remained flat. The company announced a partnership to bundle its streaming services with those of Walt Disney Co (NYSE:DIS), aiming to offer discounts to consumers. WBD shares dropped 2.18% in premarket trading.
May 09, 2024 | 1:05 pm
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NEGATIVE IMPACT
Warner Bros. Discovery reported a significant Q1 revenue decline and a net loss, missing consensus estimates. The company also announced a streaming service bundle with Disney.
The reported revenue decline and net loss, combined with the EPS miss, are likely to negatively impact investor sentiment in the short term. The announcement of the streaming service bundle with Disney may provide some positive outlook, but the immediate market reaction was negative, as indicated by the premarket share price drop.
CONFIDENCE 90
IMPORTANCE 90
RELEVANCE 100
POSITIVE IMPACT
Walt Disney Co is partnering with Warner Bros. Discovery to bundle streaming services, aiming to offer discounts to consumers this summer.
The partnership with Warner Bros. Discovery to bundle streaming services could be seen as a strategic move to enhance Disney's streaming offerings and potentially increase subscriber numbers. This collaboration might be viewed positively by investors, considering the potential for increased market share and revenue in the streaming segment.
CONFIDENCE 80
IMPORTANCE 70
RELEVANCE 75