Warner Bros Discovery Posts Q4 Miss, Gap With Competitors Is Widening: Analyst

by Priya Nigam Benzinga Staff Writer

Zinger Key Points

Warner Bros Discovery reported Q4 revenues at $10.0B and a loss of 20 cents per share, missing estimates.
Although the company has renewed deals with five of its largest US pay-TV distributors, they are a 10% discount.
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Shares of Warner Bros Discovery Inc WBD Thursday tanked after the company reported its fourth-quarter results.

The company's revenue growth is likely to be flat, with negative earnings, over the next couple of years, according to Needham.

The Warner Bros Discovery Analyst: Analyst Laura Martin maintained a hold rating on Warner Bros Discovery.

The Warner Bros Discovery Thesis: The company reported its fourth-quarter revenues at $10.0 billion and a loss of 20 cents per share, both missing Needham's estimates, Martin said in the note.

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While Warner Bros Discovery renewed agreements with five of its six largest US pay-TV distributors, these are likely to have been done at around a 10% discount to the prior deals, "which helps explain why some were renewed early," she added.

The company is working to turn around its film segment, the analyst stated. "WBD views bundling as a key strategy to build its global OTT penetrations, because bundles typically grow subscribers, lower churn, and drive higher LTV (i.e., monetization upside)," she further wrote.

"Strategically, we worry that WBD is too small to compete, and that the gap is widening over time," Martin said.

Price Action: Shares of Warner Bros Discovery had risen by 1.00% to $11.77 at the time of publication on Friday.

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