Warner Bros. Discovery (NASDAQ:WBD) reported a revenue miss and profit beat for the third quarter, hurt by weakness in its linear networks business, offsetting streaming and studios growth.
Shares of the company down nearly 1% in premarket trading on Thursday.
In Q3, revenue in the networks segment fell 22% to $2.88B. The year-ago period benefitted from the broadcast of the Olympics in Europe.
However, Seeking Alpha analyst Max Greve said the overall revenue shortfall is less alarming than the specific trends in networks and pointed out the 20% decline in adjusted EBITDA in the segment.
“WBD is now losing 9% of linear subscribers each year and only netting 2% rate increases, producing substantial declines. This is not just noise from the Olympics—every quarter this year has shown similar trends,” Greve said on the networks’ business.
Studios and streaming segment revenue rose 7% to $5.28B. Within the streaming business, growth was mostly flat, while studios saw a 23% growth, benefitting from higher box office collections from movies like Superman, The Conjuring: Last Rites, and Weapons, and higher content licensing.
The company ended the quarter with 128 million streaming subscribers, an increase of 2.3 million compared to Q2, but below the consensus estimate of 128.63 million.
The New York-based media conglomerate reported a net loss of $128M for the three months ended September 30, compared with a net profit of $135M in the same period last year.
On a per-share basis, it lost 6 cents, while analysts were expecting the company to lose 9 cents apiece.
Revenue fell 5.9% to $9.05B, below the consensus estimate of $9.19B.