Warner Bros. Discovery posted disappointing results in the first quarter despite the growth of streaming.
But the stock increased Thursday on renewed speculations according to which the company will run its slipper channels.
At the end of last year, David Zaslav-Warner Bros. entertainment. Discovery divided its activities into two divisions To separate its activity from a cable channel in difficulty but always profitable.
A division is anchored by its film and television studios from Burbank, HBO and Streaming. The second contains the The large stable of the company's wired networkswhich includes CNN, Cartoon Network, HGTV and TLC.
On Thursday, the company's shares opened the fall on financial results, but jumped 5% after CNBC said that the company could lose its wired channels. At noon, shares were negotiated at around $ 9.
Traditional entertainment companies, including Warner Bros. Discovery and Paramount Global have experienced difficulties in the recognition of investors that young consumers have little interest in cable television, who has long provided a firm financial basis for television companies.
The problem is particularly sharp for Zaslav, which has spent almost a decade Bulking in its portfolio with expensive acquisitions that have added more channels.
Wall Street wants companies to reproduce. Competitor nbcuniversal plans to turn its cable channelsIncluding CNBC, MSNBC, USA and Golf Channel, later this year in a new audience Negotiated company called slope.
When calling the results, Zaslav refused to say if a spin-off in his company was in preparation.
“We can move quickly if we decide to change,” said Zaslav.
The company posted a net loss of $ 453 million, which highlighted continuous difficulties in key commercial units, including lower television advertising in its wired chains.
The company lost 18 cents by share on an adjusted basis, which was worse than analysts awaited it. However, the result was an improvement compared to the first quarter of last year, when Warner Bros. Discovery has lost nearly a billion dollars.
The company generated $ 8.98 billion in revenue in the last quarter, lacking estimates by the $ 9.61 billion analyst.
During the first quarter, cable channel revenues decreased 7% to 4.8 billion dollars.
The company added 5.3 million subscribers in streaming in the first quarter, which presented the third season of the series of exotic HBO resort, “The white lotus,“And the drama of the Max hospital,”The Pitt. “”
The streaming unit, which includes the HBO linear canal, now has 122 million customers. Streaming income increased by nearly $ 2.7 billion in the quarter, and its adjusted profits came to $ 339 million, compared to $ 86 million during the annual period.
“Our commitment to high quality narration … continues to be the engine that feeds the discovery of Warner Bros.,” Zaslav told analysts.
The company's Burbank film studio did not correspond to the success of “Dune: Part” from last year. Its big outing for the quarter, Bong Joon Ho “science fiction film Mickey 17», With Robert Pattinson, had a hard time breaking.
“Mickey 17” had a budget reported of $ 118 million and the studio spent millions of people in marketing. World ticket sales have reached $ 132 million.
Revenue studio, which includes television production and video games, dropped from 18% to 2.3 billion dollars in the first quarter.
Earlier this spring, it was reported that Zaslav was Impatient with his management team of film studios.
But the studio started its second quarter with a blow: “A Minecraft film”, a blockbuster This exceeded $ 875 million in world ticket sales. Ryan Coogler's “sinners” Follow -up and approach to the 250 million dollars mark.
“We are going to have an absolutely incredible second quarter,” promised analysts the financial director Gunnar Wiedenfels.
Since Zaslav and his Discovery team have taken over Warner companies three years ago, the company strongly swivel its strategy.
The previous owner AT&T has spent billions to launch HBO max in order to rely on the reputation of high quality HBO. The Zaslav team abandoned HBO of the title to try to please a wider audience.
The leaders struck the programming and instituted several cycles of personnel discounts.
The programmers ordered a series with a large appeal like “The Pitt”, which was a solid artist for Max.
The company refused to spend a big Keep the National Assn Basket., And so he will Lose these rights for his TNT channel this fall.
“In the end, sport is a rental company,” said Zaslav. “We do not want to flood the area … It is a question of harvesting our (intellectual property).”
Now said Zaslav, the company focuses on produce less content. He hopes to return to a time when the company was known for its high quality Films and shows by HBO and Warner Bros.
Last year, the Zaslav The remuneration package increased to $ 52 millionDespite the rocky year for his business.
