Warner Bros. Discovery (WBD) stock is higher in afternoon trading Thursday as investors parse the company's first-quarter earnings report and news of a streaming bundle offer with Walt Disney (DIS).
In the three months ended March 31, Warner Bros. Discovery's revenue decreased 7% year-over-year to $9.96 billion. Its per-share loss of 40 cents from a loss of 44 cents in the year-ago period.
Free cash flow (FCF), which is the cash remaining after a company has paid its expenses, interest on debt, taxes and long-term investments to grow its business, showed a major improvement, coming in at positive $390 million compared with negative $930 million a year ago.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
"We are pleased with our progress in the first quarter as evidenced by strong results in important KPIs," Warner Bros. Discovery CEO David Zaslav said in a statement. “Importantly, we once again delivered strong free cash flow, even in our seasonally weakest FCF quarter."
The Q1 results came up short of analysts' expectations. According to CNBC, Wall Street was expecting revenue of $10.2 billion and a loss of 24 cents per share.
The bright spot for Warner Bros. Discovery was its Max streaming unit, which saw revenues increase "modestly" to about $2.5 billion, driven by a 69.9% increase in advertising revenue to $175 million. The unit added 2 million subscribers from the prior quarter to bring its total to 99.6 million.
"We will soon be rolling out Max to 29 countries across Europe, and the content lineup for Max over the coming year is one of our strongest ever," Zaslav said. "Warner Bros. Pictures also had a strong start to the year as the first studio to reach $1 billion in both overseas and global box office, and they have a great slate in the works."
Warner Bros. Discovery and Disney unveil streaming bundle
Another potential growth driver for Warner Bros. Discovery is the new streaming bundle offer that includes Max and Disney's Disney Plus and Hulu platforms.
The deal was announced Wednesday, May 8, and will be available in ad-supported and ad-free plans.
The bundle creates the "opportunity to drive incremental subscriber growth," said Zaslov in today's earnings call, adding that "this product will help increase retention and lower churn, and thus support higher customer lifetime values." He added that the bundle will be available this summer.
Where does WBD stock stand with analysts?
Warner Bros. Discovery shares have had a rough 2024, down 30% so far. Still, analysts are bullish on the communication services stock.
According to S&P Global Market Intelligence, the consensus analyst target price for WBD stock is $13.01, representing implied upside of more than 60% to current levels. Meanwhile, the consensus recommendation is Buy.
Related Content
-
TJX Stock: Wall Street Stays Bullish After EarningsTJX stock is trading lower Wednesday despite the TJ Maxx owner's beat-and-raise quarter, but analysts aren't worried. Here's why.
-
Beware Three Medicare Open Enrollment ScamsCrooks are perfecting Medicare Open Enrollment scams to try to steal your money or personal information.
-
TJX Stock: Wall Street Stays Bullish After Earnings
TJX stock is trading lower Wednesday despite the TJ Maxx owner's beat-and-raise quarter, but analysts aren't worried. Here's why.
-
Target Is the Worst S&P 500 Stock After Earnings. Here's WhyTarget stock is down big after the retailer missed expectations for its third quarter and slashed its full-year outlook. Here's what Wall Street is saying.
-
For a More Secure Retirement, Build in Some 'Safe Money'To solidify your retirement plan, write it down, reduce your market risk and allocate more safe money into your plan for income.
-
Five Steps to a Mindfully Fearless CareerIf, like many women, you're struggling with imposter syndrome, try developing an athlete's winning mindset. It's as simple as facing one small fear every day.
-
Stock Market Today: Stocks Rally Despite Rising Geopolitical TensionThe main indexes were mixed on Tuesday but closed well off their lows after an early flight to safety.
-
What's at Stake for Alphabet as DOJ Eyes Google's ChromeAlphabet is higher Tuesday even as antitrust officials at the DOJ support forcing Google to sell its popular web browser. Here's what you need to know.
-
Lowe's Stock Is Falling After Earnings. Here's WhyLowe's stock is lower Tuesday as Wall Street weighs a beat-and-raise quarter against declining revenue. This is what you need to know.
-
Why Walmart Stock's a Buy After Its Beat-And-Raise QuarterWalmart is the best Dow Jones stock Tuesday after the retail giant's solid earnings report and outlook and Wall Street thinks it's just getting started. Here's what they're saying.
