Warner Bros. Discovery (NASDAQ: WBD) stock tumbled after the entertainment giant reported lower-than-expected earnings and revenue for the fourth quarter, attributed to a decrease in advertising revenue and the impact of Hollywood strikes.
Warner Bros. Discovery (WBD) has released its fourth-quarter financial report, revealing a narrowed loss of 16 cents per share, a significant improvement from the loss of 86 cents per share recorded in the same period last year. However, the results fell short of analysts’ expectations, with revenue declining to $10.28 billion compared to $11 billion a year earlier.
The decrease in revenue was attributed to a downturn in TV advertising revenue and studio earnings, stemming from ongoing strikes involving writers and actors.
The entertainment giant highlighted positive growth in its subscriber base, with streaming customers reaching 97.7 million by the end of the quarter, up from 95.9 million in the previous quarter.
Warner Bros. Discovery recently made headlines with news of a potential merger with Paramount Global (PARA) that could bring an additional 63 million Paramount+ streaming subscribers into the fold, combining with Warner Bros. Discovery’s 97.7 million. Paramount will report its fourth-quarter earnings on February 28.
Warner Bros. Discovery’s CEO, David Zaslav, remains optimistic about the future, stating that the company is on a “clear pathway to growth.” Zaslav highlights achievements such as generating $6.2 billion in free cash flow and successfully paying down $5.4 billion in debt in 2023. The company also has plans to launch its Max streaming service in the key international market.
However, the company opted not to provide financial guidance for 2024.
Warner Bros. Discovery (NASDAQ: WBD) Stock Reaction
WBD stock plunged 9.94% to close at $8.61 on Friday. The traders had exchanged hands with 98,116,655 (98.11 million) shares compared to the average daily trading volume of 22.32 million.
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