Warner Bros. Discovery Stock Sinks

Warner Bros. Discovery shares fell Wednesday after the company reported a decline in advertising revenue, a wider-than-expected loss and lackluster streaming subscriber numbers.

Warner Bros. Discovery reported a net loss of $417 million for the third quarter, or 17 cents per share, an improvement from the $2.31 billion, or 95 cents per share, loss the company reported in the year-ago quarter. Revenue rose 2% to $9.98 billion.

The company’s stock was down more than 16% in afternoon trading Wednesday. The slide comes after a media rally late last week driven by Roku and Paramount earnings. Rival media giant Disney is set to report earnings after the closing bell Wednesday.

David Zaslav

Warner Bros. Discovery’s results reflected dire trends in the legacy media industry. Ad revenue in Warner Bros. Discovery’s TV networks segment fell 12% compared with a year earlier, reflecting a decline in audiences for general entertainment and news programming, as well as soft ad trends in the U.S., the company said.

The company also warned of a number of obstacles heading into 2024, including sluggish ad revenue and ongoing impacts from the actors’ strike.

“This is a generational disruption we’re going through. Going through that with a streaming service that’s losing billions of dollars, it’s really difficult to go on offense,” CEO David Zaslav said during the earnings conference call.

The third quarter marked the first full quarter since Warner Bros. Discovery launched its flagship streaming service Max in May, which merged content from HBO Max and Discovery+.

The company reported 95.1 million global direct-to-consumer subscribers, a 700,000 decrease from the previous quarter, and less than the analyst projection of 95.4 million subscribers, according to StreetAccount.