Warner Bros. Discovery (WBD) plans to report first-quarter earnings before the bell on Thursday as the media giant works to reduce debt amid a downturn in its linear TV business. and an unfavorable advertising market. Investors are also looking for updates on NBA media rights after a Wall Street Journal report said the company was at risk of losing them to rival NBCUniversal (CMCSA). I’m paying attention.
On Monday, WBD CEO David Zaslav, speaking at the Milken Institute annual conference in Beverly Hills, did not elaborate on the status of ongoing discussions.
“We continue to have constructive negotiations with the NBA,” he said. “It’s a great league. The TNT team is doing a great job. And we love the NBA.”
The company has struggled in recent quarters, with profits hurt by a weak linear advertising environment and pressure on affiliate fees, the fees pay-TV providers pay network owners to run their channels. This will likely impact first-quarter EBITDA, with full-year adjusted EBITDA at risk of falling below $10 billion, according to the latest estimates from Bloomberg. This was $4 billion lower than analysts expected at the time of the merger.
According to Bloomberg estimates, Wall Street expects the following in the first quarter:
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Revenue: $10.27 billion vs. $10.70 billion in Q1 2023
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Adjusted loss per share: Q1 2023 -$0.24 vs -$0.44
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Net increase in subscribers: 1.25 million vs. 1.6 million in Q1 2023
“WBD has a big year ahead of it, but the first quarter is probably not going to be a great start,” Macquarie analyst Tim Nolen wrote in a note to clients ahead of the results.
Still, the analyst said the company has some momentum due to its upcoming sports streaming partnerships with Disney (DIS) and Fox (FOXA), as well as its Max Streaming service, which recently launched in markets outside the U.S. such as Latin America and Europe. He said there is.
In February, the company revealed that its direct-to-consumer streaming division was profitable for the full year 2023, with EBITDA of $103 million, compared to a loss of about $2.1 billion in 2022.
The company is reportedly aiming to further cut costs and further increase streaming fees. The cost-cutting plan could include layoffs after WBD cut 2,000 jobs over the past year, according to Bloomberg. The company did not immediately respond to Yahoo Finance’s request for comment.
