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Warner Bros. Discovery’s first-quarter 2024 performance is expected to have witnessed a sluggish ad-spending environment, primarily due to a decline in audience engagement across its domestic general entertainment and news networks, coupled with the company's exit from the AT&T SportsNet business. As more than 50% of its revenues stem from advertising, these obstacles are likely to have posed significant challenges for sustained growth.
Furthermore, subdued advertising markets in the United States and certain international arenas are expected to have exacerbated these hurdles, posing challenges for Warner Bros. Discovery to either sustain or bolster its advertising revenues.
In the previous quarter, advertising revenues decreased 8.7% year over year to $2.08 billion. This downward trajectory is expected to have persisted in the to-be-reported quarter.
The combination of high-budget movie losses and substantial debt following the merger of WarnerMedia and Discovery is likely to have exerted downward pressure on Warner Bros. Discovery's margins.
Despite these setbacks, the company concluded the fourth quarter of 2023 with 97.7 million global direct-to-consumer (DTC) subscribers, inclusive of 1.3 million from the BluTV acquisition. Adjusted for BluTV and TNT Sports Chile, subscriber figures saw a modest sequential uptick of 0.5 million.
The massive content slashing by HBO Max to cut down on its costs is likely to have reflected in user engagement in the to-be-reported quarter, despite the launch of the ad-free tier of Max on YouTube Primetime Channels in the United States in the last reported quarter.
For the first quarter, the Zacks Consensus Estimate for total DTC subscribers is currently pegged at 97.175 million, indicating a decline of 0.4% year over year.
The availability of its content across linear and digital over-the-top platforms like Hulu and Sling TV is expected to have aided traffic in the to-be-reported quarter. The increasing popularity of content on Discovery+ holds promise. Slow yet steady demand for unscripted content is likely to have contributed to Dplay’s performance.
Slow viewership growth 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 the company’s top-line growth.
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 +21.61% and carries a Zacks Rank #3 at present. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Other Stocks With the Favorable Combination
Here are some other companies worth considering, as our model shows that these also have the right combination of elements to beat on earnings in their upcoming releases.
NVIDIA is scheduled to release first-quarter fiscal 2025 results on May 22. The Zacks Consensus Estimate for NVDA’s earnings is pegged at $5.49 per share, indicating growth of 403.67% from the year-ago quarter’s reported figure.
Arista Networks (ANET - Free Report) has an Earnings ESP of +3.76% and carries a Zacks Rank #2 at present.
ANET is set to report first-quarter 2024 results on May 7. The Zacks Consensus Estimate for the company’s earnings is pegged at $1.74 per share, indicating a rise of 21.68% from the year-ago quarter’s reported figure.
Docebo (DCBO - Free Report) has an Earnings ESP of +8.00% and a Zacks Rank #3 at present.
Docebo is set to report first-quarter 2024 results on May 9. The Zacks Consensus Estimate for DCBO’s earnings is pegged at 17 cents per share, indicating growth of 88.89% from the year-ago quarter’s reported figure.
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What Awaits Warner Bros. Discovery (WBD) in Q1 Earnings?
Warner Bros. Discovery (WBD - Free Report) is set to report first-quarter 2024 results on May 9.
The Zacks Consensus Estimate for loss has widened by 1 cent to 24 cents per share in the past 30 days.
The consensus mark for revenues is pegged at $10.29 billion, implying a 3.84% decrease from the year-ago quarter’s reported figure.
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
Ad Revenue Slump to Dampen WBD’s Q1 Earnings
Warner Bros. Discovery’s first-quarter 2024 performance is expected to have witnessed a sluggish ad-spending environment, primarily due to a decline in audience engagement across its domestic general entertainment and news networks, coupled with the company's exit from the AT&T SportsNet business. As more than 50% of its revenues stem from advertising, these obstacles are likely to have posed significant challenges for sustained growth.
Furthermore, subdued advertising markets in the United States and certain international arenas are expected to have exacerbated these hurdles, posing challenges for Warner Bros. Discovery to either sustain or bolster its advertising revenues.
In the previous quarter, advertising revenues decreased 8.7% year over year to $2.08 billion. This downward trajectory is expected to have persisted in the to-be-reported quarter.
The combination of high-budget movie losses and substantial debt following the merger of WarnerMedia and Discovery is likely to have exerted downward pressure on Warner Bros. Discovery's margins.
Despite these setbacks, the company concluded the fourth quarter of 2023 with 97.7 million global direct-to-consumer (DTC) subscribers, inclusive of 1.3 million from the BluTV acquisition. Adjusted for BluTV and TNT Sports Chile, subscriber figures saw a modest sequential uptick of 0.5 million.
The massive content slashing by HBO Max to cut down on its costs is likely to have reflected in user engagement in the to-be-reported quarter, despite the launch of the ad-free tier of Max on YouTube Primetime Channels in the United States in the last reported quarter.
For the first quarter, the Zacks Consensus Estimate for total DTC subscribers is currently pegged at 97.175 million, indicating a decline of 0.4% year over year.
The availability of its content across linear and digital over-the-top platforms like Hulu and Sling TV is expected to have aided traffic in the to-be-reported quarter. The increasing popularity of content on Discovery+ holds promise. Slow yet steady demand for unscripted content is likely to have contributed to Dplay’s performance.
Slow viewership growth 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 the company’s top-line growth.
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 +21.61% and carries a Zacks Rank #3 at present. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Other Stocks With the Favorable Combination
Here are some other companies worth considering, as our model shows that these also have the right combination of elements to beat on earnings in their upcoming releases.
NVIDIA (NVDA - Free Report) has an Earnings ESP of +2.50% and carries a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
NVIDIA is scheduled to release first-quarter fiscal 2025 results on May 22. The Zacks Consensus Estimate for NVDA’s earnings is pegged at $5.49 per share, indicating growth of 403.67% from the year-ago quarter’s reported figure.
Arista Networks (ANET - Free Report) has an Earnings ESP of +3.76% and carries a Zacks Rank #2 at present.
ANET is set to report first-quarter 2024 results on May 7. The Zacks Consensus Estimate for the company’s earnings is pegged at $1.74 per share, indicating a rise of 21.68% from the year-ago quarter’s reported figure.
Docebo (DCBO - Free Report) has an Earnings ESP of +8.00% and a Zacks Rank #3 at present.
Docebo is set to report first-quarter 2024 results on May 9. The Zacks Consensus Estimate for DCBO’s earnings is pegged at 17 cents per share, indicating growth of 88.89% from the year-ago quarter’s reported figure.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.