We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
The Zacks Consensus Estimate for loss has widened by a penny to 5 cents per share in the past 30 days. The consensus mark for revenues is pegged at $9.98 billion, indicating no change year over year.
Find the latest EPS estimates and surprises on Zacks Earnings Calendar.
Let’s see how things have shaped up for this announcement.
Warner Bros. Discovery, Inc. Price and EPS Surprise
Several fundamental challenges are expected to have influenced Warner Bros. Discovery's third-quarter performance. A primary concern centers on advertising revenues, which constitutes over 50% of the company's income stream.
The advertising environment faces headwinds from decreased audience engagement across domestic general entertainment and news networks, compounded by the company's strategic exit from the AT&T SportsNet business. This trend is likely to have continued in the third quarter. Advertising revenues declined 3.5% year over year to $2.43 billion in the second quarter. Both domestic and international advertising markets show signs of softness.
Financial pressures may manifest in margin compression, attributed to losses from high-budget film productions and substantial debt obligations stemming from the WarnerMedia-Discovery merger.
However, the Direct-to-Consumer (DTC) segment presents more positive indicators for the quarter under review. The company reported 103.3 million global DTC subscribers in second-quarter 2024, reflecting a sequential increase of 3.6 million. Global DTC Average Revenue Per User (ARPU) showed 4% growth (excluding currency effects) to $8.00, driven by domestic ad tier expansion and shifts in distribution channels, though partially offset by growth in lower-ARPU international markets.
Content distribution strategy may provide some counterbalance to these challenges. The company's multi-platform approach, leveraging both linear and digital over-the-top platforms like Hulu and Sling TV, could support traffic growth.
A significant development in the third quarter is the strategic partnership with Charter Communications (CHTR), integrating Max (Ad Lite) and Discovery+ content into Spectrum TV Select packages. Steady viewership growth across the company's channel portfolio, including major networks like Discovery Channel, Food Network and HGTV, might have impacted overall revenue performance.
For the third quarter, the Zacks Consensus Estimate for total DTC subscribers is currently pegged at 107.663 million, indicating an increase of 13.2% year over year.
What Our Model Indicates
According to 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. But that’s not the case here.
WBD has an Earnings ESP of -20.37% and a Zacks Rank #5 (Strong Sell) at present. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks to Consider
Here are some stocks worth considering, as our model shows that these have the right combination of elements to beat on earnings this season.
Image: Bigstock
What Awaits Warner Bros. Discovery This Earnings Season?
Warner Bros. Discovery (WBD - Free Report) is slated to report third-quarter 2024 results on Nov. 7.
The Zacks Consensus Estimate for loss has widened by a penny to 5 cents per share in the past 30 days. The consensus mark for revenues is pegged at $9.98 billion, indicating no change year over year.
Find the latest EPS estimates and surprises on Zacks Earnings Calendar.
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
Several fundamental challenges are expected to have influenced Warner Bros. Discovery's third-quarter performance. A primary concern centers on advertising revenues, which constitutes over 50% of the company's income stream.
The advertising environment faces headwinds from decreased audience engagement across domestic general entertainment and news networks, compounded by the company's strategic exit from the AT&T SportsNet business. This trend is likely to have continued in the third quarter. Advertising revenues declined 3.5% year over year to $2.43 billion in the second quarter. Both domestic and international advertising markets show signs of softness.
Financial pressures may manifest in margin compression, attributed to losses from high-budget film productions and substantial debt obligations stemming from the WarnerMedia-Discovery merger.
However, the Direct-to-Consumer (DTC) segment presents more positive indicators for the quarter under review. The company reported 103.3 million global DTC subscribers in second-quarter 2024, reflecting a sequential increase of 3.6 million. Global DTC Average Revenue Per User (ARPU) showed 4% growth (excluding currency effects) to $8.00, driven by domestic ad tier expansion and shifts in distribution channels, though partially offset by growth in lower-ARPU international markets.
Content distribution strategy may provide some counterbalance to these challenges. The company's multi-platform approach, leveraging both linear and digital over-the-top platforms like Hulu and Sling TV, could support traffic growth.
A significant development in the third quarter is the strategic partnership with Charter Communications (CHTR), integrating Max (Ad Lite) and Discovery+ content into Spectrum TV Select packages. Steady viewership growth across the company's channel portfolio, including major networks like Discovery Channel, Food Network and HGTV, might have impacted overall revenue performance.
For the third quarter, the Zacks Consensus Estimate for total DTC subscribers is currently pegged at 107.663 million, indicating an increase of 13.2% year over year.
What Our Model Indicates
According to 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. But that’s not the case here.
WBD has an Earnings ESP of -20.37% and a Zacks Rank #5 (Strong Sell) at present. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks to Consider
Here are some stocks worth considering, as our model shows that these have the right combination of elements to beat on earnings this season.
Flutter Entertainment PLC (FLUT - Free Report) has an Earnings ESP of +172.73% and sports a Zacks Rank #1 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Shopify’s shares have risen 20.7% year to date. FLUT is set to report its third-quarter 2024 results on Nov. 12.
DraftKings (DKNG - Free Report) has an Earnings ESP of +13.83% and a Zacks Rank of 3 at present.
DraftKings’s shares have gained 1.6% year to date. DOCN is slated to report its third-quarter 2024 results on Nov. 7.
Airbnb (ABNB - Free Report) has an Earnings ESP of +0.12% and a Zacks Rank #3 at present.
ABNB’s shares have gained 15.4% year to date. ABNB is set to report third-quarter 2024 results on Nov. 7.