Warner Bros. Discovery earnings miss across the board

Warner Bros. Discovery (WBD) reported third quarter earnings after the bell on Thursday, missing expectations across several areas.

Here are Warner Bros. Discovery's third quarter results compared to Wall Street's consensus estimates, as compiled by Bloomberg:

  • Revenue: $9.82 billion versus $10.37 billion expected

  • Adj. loss per share: -$0.95 versus -$0.17 expected

  • Total DTC subscribers: 2.8 million net additions versus 3.27 million expected

The company also reported a net loss of $2.3 billion in the three months ending September 30 after a $3.4 billion loss in Q2.

Increased restructuring charges, macroeconomic challenges like foreign exchange headwinds, further subscriber losses in linear television, and a slowdown in advertising continued to pressure profits in the quarter.

The company's debt load fell slightly compared to the second quarter from $53 billion to $50.4 billion while advertising revenue decreased to $2 billion versus $2.7 billion in Q2.

Subscriber growth slightly missed expectations in the quarter following "House of the Dragon's" record-breaking success. The company added 2.8 million net additions (versus expectations of 3 million and 1.7 million net-adds in Q2). Management has guided a long-term target of 130 million paying users by 2025.

Profitability continues to remain a top concern for investors as faith in streaming fundamentals wanes. The company reiterated its 2022 adjusted EBITDA guidance between $9 billion and $9.5 billion, a decline from previous forecasts of $10 billion. Management had also cut its full-year 2023 EBITDA guidance from $14 billion to $12 billion.

The company's broader restructuring efforts are also a factor: The streaming giant looks to slash $3 billion worth of costs over the next two years and prepares to combine HBO Max with Discovery+.

"House of Dragons" (screenshot/Warner Bros. Discovery)
"House of Dragons" (screenshot/Warner Bros. Discovery)

Warner Bros. Discovery initiated yet another round of layoffs last month, including the television studio reportedly cutting 26% of its headcount (125 positions) across its scripted, unscripted, and animation divisions — laying off 82 staffers and opting not to fill an additional 43 vacant positions.

The company also shuttered its digital production arm Stage 13 and the 40-year-old Warner Bros. Television Workshop, a long-standing pioneer in fostering new and diverse talent.

Alexandra is a Senior Entertainment and Media Reporter at Yahoo Finance. Follow her on Twitter @alliecanal8193 and email her at alexandra.canal@yahoofinance.com

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