Warner Bros. Discovery reported huge loss in Q2, shares dropped sharply

Warner Bros. Discovery stocks were hit on Friday after publishing the second-quarter earnings report on Thursday after-market. It dives into the details of the serious financial and operational pressures the company is facing.

On Thursday after-market, the company reported a $3.42 billion loss in the second quarter, this also includes a $1 billion write-down for restructuring charges and additional costs related to its recent merger transaction with AT&T.

Key points of second-quarter earnings report:

• $3.42 billion loss in Q2 including $1 billion write-down for restructuring charges
• estimated EBIDTA $9 – $9,5 billion in 2022 compared to last forecast of $10 billion
• estimated EBIDTA $12 billion in 2023 compared to last forecast of $14 billion

In addition, layoffs are largely expected in the future, say the experts.

The company has recently announced major change in its streaming service wherein HBO Max will be combined with Discovery+ to be one platform, setting to launch next summer. That’s because Discovery is running as more global and non-fiction, while HBO Max is hampered by more expensive, higher-quality script programs.

Total number of subscribers in Q2 and the expectation after the merging into single streaming:

• 130 million global streaming subscribers by 2025
• 92,1 million total number of subscribers in Q2
• this number was less by 1,7 million in Q1
• the biggest competitor Netflix had 220 million total number of subscribers in Q2

Warner Bros. is a well-known media and entertainment company, it has a diversified portfolio of brands and contents across television, film, and streaming including CNN, HBO, HBO Max, Discover Channel, etc. Its streaming segment has put under high pressure due to the strong competition in the streaming market worldwide.

Warner Bros. Discovery shares were down more than 17% on Friday. The company’s market cap has been plummeting since the completed merge with AT&T. The merge took about $43 billion compared to the Friday’s market cap of $35,4 billion. The share price fluctuated between $31,5 and $12,8 on a 52-week basis.