Investors bid for Warner Bros. stock today. Discovery, while its chief financial officer described a US ad market “that continues to be weaker than we had hoped” and a recovery that is difficult to predict “with any confidence.”
After the quarterly results and commentary, shares fell more than 16% to around $9.77 in afternoon trading.
“It is now becoming increasingly clear that 2024, like 2023, will bring some complexity, particularly with respect to the possibility of continued sluggish advertising trends,” Chief Financial Officer Gunnar Weidenfels said in a conference call with Wall Streeters after the numbers were announced. International markets are “more stable” compared to the US and streaming advertising is solid.
However, advertising revenue in WBD’s network segment fell to $1.7 billion year over year from $1.9 billion in the three months ended September. “The condition of the entire linear [market into] “The second half of this year was disappointing,” Weidenfels said. “And looking ahead, the timing of an ad recovery is difficult for all of us at this time, even though it’s still early days [to predict] with some conviction.”
The situation could have an impact on WBD’s gross debt as the company is still heavily leveraged – meaning the target could be out of reach “without a meaningful recovery” in the market. “We remain hopeful,” he said.
When asked about it in a question-and-answer session, the CFO said he doesn’t necessarily intend to steer downward.
“The only reason I brought this up is because we had a forecast of how we would reach our target debt range by the end of next year. And again, based on the early indications that we’re seeing from the market right now, I’m just not confident to stand here today and say, ‘Don’t worry, we’re definitely going to hit that range.’
“We’re going to have a great year. I’m just not in a position to give specific advice at this time.”
WBD’s third quarter was mixed Barbie Currency and free cash flow beloved by Wall Street are offset by sluggish advertising and the impact of the actors’ strike on one of the industry’s biggest content creators.
WBD’s total operating income of $9.98 billion increased 1%. Net loss fell to $417 million.
Source: Deadline
Joseph Fearn is an entertainment and television aficionado who writes for The Fashion Vibes. With a keen eye for what’s hot in the world of TV, Joseph keeps his readers informed about the latest trends and must-see shows.
