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Warner Bros. Discovery's (WBD) Q4 Earnings, Ad Sales Drop Y/Y
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Warner Bros. Discovery (WBD - Free Report) reported fourth-quarter 2022 loss of 86 cents per share. The company had reported earnings of 8 cents in the year-ago quarter. The Zacks Consensus Estimate was pegged at a loss of 3 cents per share for the reported quarter.
The loss included a $1.85 billion charge of pre-tax amortization and $1.2 billion in pre-tax restructuring charges.
Revenues increased 245.4% year over year to $11 billion, which missed the Zacks Consensus Estimate by 0.2%.
Warner Bros. Discovery, Inc. Price, Consensus and EPS Surprise
Advertising revenues increased 34.6% year over year to $2.28 billion. Distribution revenues increased 280.5% year over year to $4.96 billion. Content revenues increased from $173 million reported in the year-ago quarter to $3.44 billion. Other revenues were $319 million compared with $12 million reported in the year-ago quarter.
Studios (34.9% of revenues) reported revenues of $3.84 billion, down 25.4% from the year-ago quarter. Revenues decreased 23% ex-FX from the prior-year quarter on a pro forma combined basis.
Within the segment, content revenues decreased 26.4% year over year to $3.63 billion due to lower TV licensing and to a lesser extent, lower games and home entertainment revenues.
Networks (50.1% of revenues) revenues decreased 8.6% on a year-over-year basis to $5.51 billion. Advertising revenues decreased 14% ex-FX due to audience declines in domestic general entertainment networks and soft advertising markets mainly in the Unites States and to a lesser extent, certain international markets.
Within the segment, content revenues increased 7% ex-FX, primarily driven by the third-party content licensing deals globally.
Direct-to-Consumer (DTC) revenues (22.3% of revenues) increased 3.9% from the year-ago quarter to $2.45 billion. Global DTC average revenue per unit was $7.58.
WBD ended fourth-quarter 2022 with 96.1 million global DTC subscribers compared with 94.9 million subscribers in the previous quarter. The relaunch of HBO Max on Amazon Channels in December helped subscriber growth.
Operating Details
In the fourth quarter, selling, general and administrative expenses increased 134.9% from the year-ago quarter’s levels to $2.51 billion.
Adjusted EBITDA increased 128.9% from the year-ago quarter’s levels to $2.6 billion.
The company reported an operating loss of $1.89 billion compared with an operating income of $508 million in the year-ago quarter.
Balance Sheet
As of Dec 31, 2022, cash & cash equivalents were $3.73 billion compared with $2.42 billion as of Sep 30, 2022.
Zacks Rank & Other Stocks to Consider
Currently, Warner Bros. Discovery carries a Zacks Rank #3 (Hold).
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Warner Bros. Discovery's (WBD) Q4 Earnings, Ad Sales Drop Y/Y
Warner Bros. Discovery (WBD - Free Report) reported fourth-quarter 2022 loss of 86 cents per share. The company had reported earnings of 8 cents in the year-ago quarter. The Zacks Consensus Estimate was pegged at a loss of 3 cents per share for the reported quarter.
The loss included a $1.85 billion charge of pre-tax amortization and $1.2 billion in pre-tax restructuring charges.
Revenues increased 245.4% year over year to $11 billion, which missed the Zacks Consensus Estimate by 0.2%.
Warner Bros. Discovery, Inc. Price, Consensus and EPS Surprise
Warner Bros. Discovery, Inc. price-consensus-eps-surprise-chart | Warner Bros. Discovery, Inc. Quote
Top-Line Details
Advertising revenues increased 34.6% year over year to $2.28 billion. Distribution revenues increased 280.5% year over year to $4.96 billion. Content revenues increased from $173 million reported in the year-ago quarter to $3.44 billion. Other revenues were $319 million compared with $12 million reported in the year-ago quarter.
Studios (34.9% of revenues) reported revenues of $3.84 billion, down 25.4% from the year-ago quarter. Revenues decreased 23% ex-FX from the prior-year quarter on a pro forma combined basis.
Within the segment, content revenues decreased 26.4% year over year to $3.63 billion due to lower TV licensing and to a lesser extent, lower games and home entertainment revenues.
Networks (50.1% of revenues) revenues decreased 8.6% on a year-over-year basis to $5.51 billion. Advertising revenues decreased 14% ex-FX due to audience declines in domestic general entertainment networks and soft advertising markets mainly in the Unites States and to a lesser extent, certain international markets.
Within the segment, content revenues increased 7% ex-FX, primarily driven by the third-party content licensing deals globally.
Direct-to-Consumer (DTC) revenues (22.3% of revenues) increased 3.9% from the year-ago quarter to $2.45 billion. Global DTC average revenue per unit was $7.58.
WBD ended fourth-quarter 2022 with 96.1 million global DTC subscribers compared with 94.9 million subscribers in the previous quarter. The relaunch of HBO Max on Amazon Channels in December helped subscriber growth.
Operating Details
In the fourth quarter, selling, general and administrative expenses increased 134.9% from the year-ago quarter’s levels to $2.51 billion.
Adjusted EBITDA increased 128.9% from the year-ago quarter’s levels to $2.6 billion.
The company reported an operating loss of $1.89 billion compared with an operating income of $508 million in the year-ago quarter.
Balance Sheet
As of Dec 31, 2022, cash & cash equivalents were $3.73 billion compared with $2.42 billion as of Sep 30, 2022.
Zacks Rank & Other Stocks to Consider
Currently, Warner Bros. Discovery carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the Consumer Discretionary sector are Six Flags Entertainment , BJ's Wholesale Club (BJ - Free Report) and Sportradar Group (SRAD - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Six Flags Entertainment, BJ's Wholesale Club and Sportradar Group are scheduled to report quarterly results on Mar 2, Mar 9 and Mar 1, respectively.
The Zacks Consensus Estimate for SIX’s fourth-quarter 2022 earnings is pegged at 23 cents per share, unchanged over the past 30 days.
The Zacks Consensus Estimate for BJ's fourth-quarter 2022 earnings is pegged at 88 cents per share, unchanged over the past 30 days.
The Zacks Consensus Estimate for SRAD’s fourth-quarter 2022 earnings is pegged at 3 cents per share, unchanged over the past 30 days.