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For the quarter, the Zacks Consensus Estimate for loss has widened by 3 cents to 9 cents per share in the past 30 days.
The consensus mark for revenues is pegged at $9.94 billion, implying a 1.19% increase from the year-ago quarter’s reported figure.
Warner Bros. Discovery had revised its 2023 financial guidance in an attempt to navigate the challenges posed by the strikes in the entertainment industry by the Writers Guild of America (WGA) and Screen Actors Guild – American Federation of Television and Radio Artists (SAG-AFTRA) in the to-be-reported quarter.
The WGA went on strike on May 2, 2023, followed by SAG-AFTRA on Jul 14, 2023. The strikes were lobbying for fair pay, protection against artificial intelligence and more.
The company guided lower adjusted EBITDA for the full year in the range of $10.5-$11 billion due to the strikes' continued impact in the to-be-reported quarter. This reflected a negative impact of approximately $300 million to $500 million, primarily due to the strikes affecting the timing and performance of the 2023 film slate and content production, which are also expected to have impacted the third-quarter results.
WBD has raised its free cash flow expectations for the full year to at least $5 billion.
The company anticipated exceeding $1.7 billion in free cash flow for the third quarter of 2023, partly due to the strong performance of the Barbie franchise and the impact of the strikes on certain factors.
Let’s see how things have shaped up for this announcement.
Warner Bros. Discovery, Inc. Price and EPS Surprise
Warner Bros. Discovery’s third-quarter 2023 performance is expected to have witnessed a slow ad-spending environment due to a decline in audience in domestic general entertainment and news networks and soft advertising markets, mainly in the Unites States. The company generates more than 50% of its revenues from advertising.
In the second quarter, advertising revenues decreased 7.4% year over year to $2.51 billion. This trend is likely to have continued in the to-be-reported quarter.
WBD has been finding itself in a thick soup lately. Along with losses that it is facing on its high-budget movies, the company has been in high debt ever since the merger of Warner Media and Discovery. This is expected to have weighed on margins in the to-be-reported quarter.
The upcoming recessionary fears could draw back users to cut down spending on their recreational activities. The massive content slashing by HBO Max to cut down on its costs is expected to have reflected upon user engagement in the to-be-reported quarter.
WBD ended second-quarter 2023 with 95.8 million global Direct-to-Consumer (DTC) subscribers, which reflected a decline of 1.8 million global subscribers sequentially. For the third quarter, the Zacks Consensus Estimate for total DTC subscribers is currently pegged at 94.76 million compared with 94.9 million reported in the year-ago quarter.
The company boasts a strong non-fiction content portfolio. The increasing availability of its content across linear and digital over-the-top platforms like Hulu and Sling TV is expected to have improved traffic in the to-be-reported quarter. Slow yet steady demand for unscripted content is likely to have contributed to Dplay’s performance.
Increasing subscriber growth in Max, the company’s enhanced streaming service, which launched in the United States on May 23, is expected to have aided top-line growth in the to-be-reported quarter.
Max is the destination for HBO Originals, Warner Bros. films, Max Originals, the DC universe, the Wizarding World of Harry Potter, an expansive offering of kids content and best-in-class programming across food, home, reality, lifestyle and documentaries from leading brands like HGTV, Food Network, Discovery Channel, TLC and ID.
Steady viewership of multiple channels, including Discovery Channel, Animal Planet, Food Network, HGTV, MotorTrend, Science, TLC, ID, Oprah, Eurosport, the Cooking Channel and UKTV Lifestyle, is expected to have reflected upon top-line growth in the to-be-reported quarter.
Discovery+ is off to an impressive start. Discovery+ became a sister service to AT&T's WarnerMedia's HBO Max in April 2022, following the merger with Discovery into Warner Bros.
What Our Model Says
Per the Zacks model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat.
Warner Bros. Discovery has an Earnings ESP of +21.16% and currently carries a Zacks Rank #3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Other Stocks to Consider
Here are some other stocks worth considering, as our model shows that these also have the right combination of elements to beat on earnings this season.
Image: Bigstock
What Awaits Warner Bros. Discovery (WBD) in Q3 Earnings?
Warner Bros. Discovery (WBD - Free Report) is set to report third-quarter 2023 results on Nov 8.
For the quarter, the Zacks Consensus Estimate for loss has widened by 3 cents to 9 cents per share in the past 30 days.
The consensus mark for revenues is pegged at $9.94 billion, implying a 1.19% increase from the year-ago quarter’s reported figure.
Warner Bros. Discovery had revised its 2023 financial guidance in an attempt to navigate the challenges posed by the strikes in the entertainment industry by the Writers Guild of America (WGA) and Screen Actors Guild – American Federation of Television and Radio Artists (SAG-AFTRA) in the to-be-reported quarter.
The WGA went on strike on May 2, 2023, followed by SAG-AFTRA on Jul 14, 2023. The strikes were lobbying for fair pay, protection against artificial intelligence and more.
The company guided lower adjusted EBITDA for the full year in the range of $10.5-$11 billion due to the strikes' continued impact in the to-be-reported quarter. This reflected a negative impact of approximately $300 million to $500 million, primarily due to the strikes affecting the timing and performance of the 2023 film slate and content production, which are also expected to have impacted the third-quarter results.
WBD has raised its free cash flow expectations for the full year to at least $5 billion.
The company anticipated exceeding $1.7 billion in free cash flow for the third quarter of 2023, partly due to the strong performance of the Barbie franchise and the impact of the strikes on certain factors.
Let’s see how things have shaped up for this announcement.
Warner Bros. Discovery, Inc. Price and EPS Surprise
Warner Bros. Discovery, Inc. price-eps-surprise | Warner Bros. Discovery, Inc. Quote
Factors to Consider
Warner Bros. Discovery’s third-quarter 2023 performance is expected to have witnessed a slow ad-spending environment due to a decline in audience in domestic general entertainment and news networks and soft advertising markets, mainly in the Unites States. The company generates more than 50% of its revenues from advertising.
In the second quarter, advertising revenues decreased 7.4% year over year to $2.51 billion. This trend is likely to have continued in the to-be-reported quarter.
WBD has been finding itself in a thick soup lately. Along with losses that it is facing on its high-budget movies, the company has been in high debt ever since the merger of Warner Media and Discovery. This is expected to have weighed on margins in the to-be-reported quarter.
The upcoming recessionary fears could draw back users to cut down spending on their recreational activities. The massive content slashing by HBO Max to cut down on its costs is expected to have reflected upon user engagement in the to-be-reported quarter.
WBD ended second-quarter 2023 with 95.8 million global Direct-to-Consumer (DTC) subscribers, which reflected a decline of 1.8 million global subscribers sequentially. For the third quarter, the Zacks Consensus Estimate for total DTC subscribers is currently pegged at 94.76 million compared with 94.9 million reported in the year-ago quarter.
The company boasts a strong non-fiction content portfolio. The increasing availability of its content across linear and digital over-the-top platforms like Hulu and Sling TV is expected to have improved traffic in the to-be-reported quarter. Slow yet steady demand for unscripted content is likely to have contributed to Dplay’s performance.
Increasing subscriber growth in Max, the company’s enhanced streaming service, which launched in the United States on May 23, is expected to have aided top-line growth in the to-be-reported quarter.
Max is the destination for HBO Originals, Warner Bros. films, Max Originals, the DC universe, the Wizarding World of Harry Potter, an expansive offering of kids content and best-in-class programming across food, home, reality, lifestyle and documentaries from leading brands like HGTV, Food Network, Discovery Channel, TLC and ID.
Steady viewership of multiple channels, including Discovery Channel, Animal Planet, Food Network, HGTV, MotorTrend, Science, TLC, ID, Oprah, Eurosport, the Cooking Channel and UKTV Lifestyle, is expected to have reflected upon top-line growth in the to-be-reported quarter.
Discovery+ is off to an impressive start. Discovery+ became a sister service to AT&T's WarnerMedia's HBO Max in April 2022, following the merger with Discovery into Warner Bros.
What Our Model Says
Per the Zacks model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat.
Warner Bros. Discovery has an Earnings ESP of +21.16% and currently carries a Zacks Rank #3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Other Stocks to Consider
Here are some other stocks worth considering, as our model shows that these also have the right combination of elements to beat on earnings this season.
Arcellx (ACLX - Free Report) has an Earnings ESP of +19.40% and carries a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Arcellx is set to announce third-quarter 2023 results on Nov 13. Shares of ACLX have gained 44.1% year to date.
Upstart (UPST - Free Report) currently has an Earnings ESP of +9.09% and sports a Zacks Rank #1.
Upstart is set to announce third-quarter 2023 results on Nov 7. Shares of UPST have rallied 129.3% year to date.
Clarivate (CLVT - Free Report) has an Earnings ESP of +5.56% and a Zacks Rank #3 at present.
Clarivate is set to announce third-quarter 2023 results on Nov 7. Shares of CLVT have declined 17.6% year to date.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.