Warner Bros. Discovery Shares Drop Following Q2 Earnings Report

Warner Bros. Discovery, Inc. WBD shares are trading lower after the company released its second-quarter financial results. Here’s what you need to know.

What To Know: The company reported revenue of $9.713 billion for the quarter, missing the analyst consensus estimate of $10.071 billion by 3.55%. The company reported an EPS loss of $4.07 per share, a significant miss compared to the analyst estimate of a 19 cents loss per share.

Revenue from the Networks segment, which includes traditional TV channels, dropped 8% to $5.272 billion. Advertising revenue within this segment declined by 9%, primarily due to a 13% decrease in U.S. network audiences and a generally soft advertising market. On a brighter note, content revenue saw a 5% increase, driven by the timing of third-party licensing deals, though this was partially offset by reduced inter-segment content licensing to the company’s Direct-to-Consumer (DTC) platforms.

What Else: Despite adding 3.6 million new global subscribers in the quarter, bringing the total DTC subscriber count to 103.3 million, DTC revenues fell 5% year-over-year to $2.568 billion. The growth in international subscribers, spurred by the launch of the Max streaming service in Latin America and Europe, was not enough to offset declines in the U.S. market.

Following the earnings report, several analysts updated their ratings and price targets for Warner Bros. Discovery:

• Needham Analyst Laura Martin reiterated a “Hold” rating.
• Evercore ISI Group Analyst Vijay Jayant maintained an “Outperform” rating but lowered the price target from $10 to $9.
• Wells Fargo Analyst Steven Cahall maintained an “Equal-Weight” rating and reduced the price target from $9 to $7.
• Goldman Sachs Analyst Michael Ng reiterated a “Neutral” rating while lowering the price target from $8.5 to $7.5.
• Benchmark Analyst Matthew Harrigan continued to rate the stock as a “Buy” but decreased the price target from $20 to $18.
• Deutsche Bank Analyst Bryan Kraft also maintained a “Buy” rating, reducing the price target from $16 to $15.

WBD Price Action: Warner Bros. shares were down by 8.75% at $7.04 according to Benzinga Pro.

See Also:

• Enphase Boosts EV Charger Game with NACS Connectors For IQ EV Chargers, Says Compatible With Tesla

Image Via Shutterstock.