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Warner Bros. Discovery (WBD) Q3 Earnings Decline Year Over Year
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Warner Bros. Discovery (WBD - Free Report) reported third-quarter 2022 loss of 95 cents per share. The company had reported earnings of 24 cents in the year-ago quarter. The Zacks Consensus Estimate was pegged at earnings of 2 cents per share for the reported quarter.
Revenues increased 211.8% year over year to $9.82 billion, which missed the Zacks Consensus Estimate by 6.54%.
Warner Bros. Discovery was the #1 TV portfolio for total time spent by viewers in the United States, TNT was the #1 TV network overall for Men between the age group of 18-49 & 18-34, driven by sports, and TLC was the #1 cable network in the industry, ex-sports, in Primetime for Women aged 25 to 54.
Warner Bros. Discovery, Inc. Price, Consensus and EPS Surprise
Advertising revenues increased 40.5% year over year to $2.04 billion. Distribution revenues increased 275.8% year over year to $4.99 billion. Content revenues increased from $352 million reported in the year-ago quarter to $2.53 billion. Other revenues were $260 million compared with $17 million reported in the year-ago quarter.
Studios (31.4% of revenues) reported revenues of $3.08 billion, up from $2 million reported in the year-ago quarter. Revenues decreased 5% ex-FX compared to the prior-year quarter, on a proforma combined basis.
TV licensing revenues declined due to fewer theatrical new releases, resulting in less products available for the pay-one window in the current year.
Theatrical performance was driven by the releases of DC League of Super-Pets and Don't Worry Darling, as well as a strong carryover from Elvis, which premiered in late June.
Networks (53.1% of revenues) revenues increased 80.5% on a year-over-year basis to $5.51 billion. Advertising revenues decreased 11% ex-FX, primarily due to audience declines for its general entertainment and news programming. Additionally, the broadcast of the Olympic Games in Europe and the timing of two NBA playoff games in 2021 negatively impacted the growth rate in the quarter.
Content revenues decreased 37%, primarily due to the sublicensing of the broadcast rights for the Olympic Games in Europe in 2021, partially offset by higher inter-segment licensing.
Direct-to-Consumer (DTC) revenues (23.6% of revenues) increased from $255 million reported in the year-ago quarter to $2.3 billion. Global DTC ARPU was $7.52.
Warner Bros. Discovery ended third-quarter 2022 with 94.9 million global DTC subscribers compared with 92.1 million subscribers in the previous quarter.
Operating Details
In the third quarter, selling, general and administrative (SG&A) expenses increased 271.6% from the year-ago quarter’s levels to $3.53 billion.
Adjusted EBITDA increased 233.9% from the year-ago quarter’s levels to $2.42 billion.
The company reported an operating loss of $2.19 billion compared to an operating income of $329 million in the year-ago quarter.
Balance Sheet
As of Sep 30, 2022, cash & cash equivalents were $2.42 billion compared with $2.57 billion as of Jun 30, 2022.
Zacks Rank & Other Stocks to Consider
Currently, Warner Bros. Discovery carries a Zacks Rank #2 (Buy).
The company’s shares have declined 49.2% in the year-to-date period compared with the Zacks Consumer Discretionary sector’s decline of 38.9%.
AMC Entertainment, Reservoir Media and American Public Education are each scheduled to report their quarterly results on Nov 8.
The Zacks Consensus Estimate for AMC Entertainment’s third-quarter 2022 loss is pegged at 27 cents per share, having widened from a loss of 25 cents over the past 30 days.
The Zacks Consensus Estimate for Reservoir Media’s third-quarter 2022 earnings is pegged at 5 cents per share, unchanged over the past 30 days.
The consensus mark for American Public Education’s third-quarter 2022 earnings is pegged at 25 cents per share, unchanged in the past 30 days.
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Warner Bros. Discovery (WBD) Q3 Earnings Decline Year Over Year
Warner Bros. Discovery (WBD - Free Report) reported third-quarter 2022 loss of 95 cents per share. The company had reported earnings of 24 cents in the year-ago quarter. The Zacks Consensus Estimate was pegged at earnings of 2 cents per share for the reported quarter.
Revenues increased 211.8% year over year to $9.82 billion, which missed the Zacks Consensus Estimate by 6.54%.
Warner Bros. Discovery was the #1 TV portfolio for total time spent by viewers in the United States, TNT was the #1 TV network overall for Men between the age group of 18-49 & 18-34, driven by sports, and TLC was the #1 cable network in the industry, ex-sports, in Primetime for Women aged 25 to 54.
Warner Bros. Discovery, Inc. Price, Consensus and EPS Surprise
Warner Bros. Discovery, Inc. price-consensus-eps-surprise-chart | Warner Bros. Discovery, Inc. Quote
Top-Line Details
Advertising revenues increased 40.5% year over year to $2.04 billion. Distribution revenues increased 275.8% year over year to $4.99 billion. Content revenues increased from $352 million reported in the year-ago quarter to $2.53 billion. Other revenues were $260 million compared with $17 million reported in the year-ago quarter.
Studios (31.4% of revenues) reported revenues of $3.08 billion, up from $2 million reported in the year-ago quarter. Revenues decreased 5% ex-FX compared to the prior-year quarter, on a proforma combined basis.
TV licensing revenues declined due to fewer theatrical new releases, resulting in less products available for the pay-one window in the current year.
Theatrical performance was driven by the releases of DC League of Super-Pets and Don't Worry Darling, as well as a strong carryover from Elvis, which premiered in late June.
Networks (53.1% of revenues) revenues increased 80.5% on a year-over-year basis to $5.51 billion. Advertising revenues decreased 11% ex-FX, primarily due to audience declines for its general entertainment and news programming. Additionally, the broadcast of the Olympic Games in Europe and the timing of two NBA playoff games in 2021 negatively impacted the growth rate in the quarter.
Content revenues decreased 37%, primarily due to the sublicensing of the broadcast rights for the Olympic Games in Europe in 2021, partially offset by higher inter-segment licensing.
Direct-to-Consumer (DTC) revenues (23.6% of revenues) increased from $255 million reported in the year-ago quarter to $2.3 billion. Global DTC ARPU was $7.52.
Warner Bros. Discovery ended third-quarter 2022 with 94.9 million global DTC subscribers compared with 92.1 million subscribers in the previous quarter.
Operating Details
In the third quarter, selling, general and administrative (SG&A) expenses increased 271.6% from the year-ago quarter’s levels to $3.53 billion.
Adjusted EBITDA increased 233.9% from the year-ago quarter’s levels to $2.42 billion.
The company reported an operating loss of $2.19 billion compared to an operating income of $329 million in the year-ago quarter.
Balance Sheet
As of Sep 30, 2022, cash & cash equivalents were $2.42 billion compared with $2.57 billion as of Jun 30, 2022.
Zacks Rank & Other Stocks to Consider
Currently, Warner Bros. Discovery carries a Zacks Rank #2 (Buy).
The company’s shares have declined 49.2% in the year-to-date period compared with the Zacks Consumer Discretionary sector’s decline of 38.9%.
Some other top-ranked stocks in the Consumer Discretionary sector include AMC Entertainment (AMC - Free Report) , Reservoir Media (RSVR - Free Report) and American Public Education (APEI - Free Report) , each carrying a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
AMC Entertainment, Reservoir Media and American Public Education are each scheduled to report their quarterly results on Nov 8.
The Zacks Consensus Estimate for AMC Entertainment’s third-quarter 2022 loss is pegged at 27 cents per share, having widened from a loss of 25 cents over the past 30 days.
The Zacks Consensus Estimate for Reservoir Media’s third-quarter 2022 earnings is pegged at 5 cents per share, unchanged over the past 30 days.
The consensus mark for American Public Education’s third-quarter 2022 earnings is pegged at 25 cents per share, unchanged in the past 30 days.