Warner Bros. Discovery announced a second quarter loss that was higher than expected but lower than a year ago. The company reported a net loss of $1.2 billion, or 51 cents per share. It is significantly less than the $3.4 billion, or $1.50 per share as of last year. The company trimmed costs by $2.2 billion, or 16%, from a year ago. Furthermore, this resulted in the lesser loss.
The Closing Amount
Revenue increased 5% to $10.4 billion, almost in line with expectations on Wall Street. However, the strong box office from “Barbie,” which was released in the third quarter, was not included in the numbers. A tiny $3 million loss was recorded by the company’s closely monitored streaming division. The loss was adjusted as earnings before interest, taxes, depreciation, and amortisation (EBITDA) basis. Although down from the positive adjusted EBITDA of $50 million in the first quarter, this is a significant improvement over the $518 million it lost on that basis a year earlier.
The New York-based company’s “Max” service was introduced during the quarter. CEO David Zaslav praised it for helping its important direct-to-consumer business track “well ahead of our financial projections. “On a pro forma combined basis, operating costs at the streaming segment declined by 8% to $2.74B while controlling for foreign exchange effects. ”
Media companies like Warner Bros. Discovery have been balancing content spending with cost management.
The Writers’ Strike
However, the strikes by the Writers Guild of America, which represents 11,000 writers for films and television shows, and SAG-AFTRA, which represents 160,000 performers, have put plans on hold for the time being. The production of films and television shows for studios and streaming services have come to an indefinite hault.
The strike had a short-term positive impact on the company’s financial results.
According to CFO Gunnar Wiedenfels, cost savings from not having productions take place, the company’s cash flow increased by more than $100 million in the quarter. While still maintaining revenue from films and shows that had already been produced before the strike.
Zaslav however expressed his continued optimism for a speedy end to the strike.