US Markets
Friday, February 23rd, 2024 4:56 pm EDT
Key Points
- Warner Bros. Discovery missed analyst targets for profit and revenue in Q4 due to slumping advertising and lack of 2024 free cash flow guidance, leading to a 12% drop in shares.
- Q4 net loss was $400 million, with declines in linear TV advertising revenue by 14% and distribution revenue by 4%, indicating ongoing challenges in the pay TV and linear advertising ecosystems.
- Despite generating $3.31 billion in Q4 free cash flow and ending 2023 with $6.16 billion, Warner Bros. Discovery anticipates free cash flow headwinds in 2024 due to increased content spending post-writers’ and actors’ strikes, while aiming for profitability with its Max streaming service and forthcoming sports joint venture with Disney and Fox.
Warner Bros. Discovery faced a downturn in its fourth-quarter performance, missing analyst expectations for both profit and revenue as advertising declined and free cash flow guidance for 2024 was omitted. The company’s net loss for the quarter was $400 million, with a 14% decline in linear television advertising revenue and a 4% drop in distribution revenue. Despite generating $3.31 billion in free cash flow for the quarter and ending 2023 with $6.16 billion, the company anticipates free cash flow headwinds in 2024 due to increased content spend following strikes by the Writers Guild of America and the Screen Actors Guild-American Federation of Television and Radio Artists. While Warner Bros. Discovery paid down $1.2 billion of debt in the quarter and $5.4 billion in 2023, it still has $44.2 billion of gross debt remaining. The company’s flagship streaming service, Max, achieved profitability for 2023, with 97.7 million global subscribers, and is projected to be profitable in 2024 despite anticipated losses in the first half of the year due to increased content spending. Additionally, Warner Bros. Discovery announced a forthcoming sports joint venture with Disney and Fox, targeting the 60 million U.S. households not subscribed to cable, with an emphasis on simplifying access to Major League Baseball, the National Hockey League, and the National Basketball Association games.
For the full original article on CNBC, please click here: https://www.cnbc.com/2024/02/23/warner-bros-discovery-wbd-earnings-q4-2023.html
