Warner Bros. Discovery, the entertainment company, has reported a wider-than-expected third-quarter loss and a decline in television revenue. This comes as Hollywood experienced strikes and faced challenges in the advertising market.
Financial Overview
- Loss: Warner Bros. posted a third-quarter loss of 17 cents per share, amounting to a total loss of $9.98 billion in revenue.
- Analysts Expectations: Analysts surveyed by FactSet had anticipated a loss of 9 cents per share on revenue of $9.97 billion.
- Year-on-Year Comparison: In the same period last year, the company recorded a loss of 95 cents per share on revenue of $9.82 billion.
Decline in Television Revenue
The company witnessed a significant decline in television revenue, particularly among its networks segment. Content revenue for this segment fell by 22% from the previous year, amounting to $215 million. Warner Bros. attributes this decline to large licensing deals from the prior year and the impact of strikes from the Writers Guild of America (WGA) and the Screen Actors Guild-American Federation of Television and Radio Artists (SAG-AFTRA).
Hollywood Strikes
The SAG-AFTRA actors have been on strike since July, demanding higher pay, residuals, and increased protections against artificial intelligence. Meanwhile, Hollywood writers ended their strike at the end of September.
Challenging Advertising Market
Warner Bros. also faced difficulties in the advertising market, resulting in a 12% drop in total advertising revenue for the quarter. The company reported a total of $1.8 billion in advertising revenue for the period.
Stock Performance
Warner Bros. shares experienced a decline of 1.9% in premarket trading on Wednesday, reaching $11.39 per share. Despite this dip, the stock has seen a 22% gain for the year.