Warner Brothers misses Q2 earnings expectations

Warner Bros. Discovery posted weaker than expected second quarter earnings Thursday amid a firestorm of speculation about a restructuring at the company that would cull costs.

The media giant, which owns HBO, CNN, Warner Bros., HGTV and TLC, reported its earnings for the first time since it merged earlier this year, combining the properties of Discovery and WarnerMedia. Shares tumbled nearly 4% in after-hours trading.

David Zaslav CEO of WBD, focused on the company’s “busy, productive” four months since the merger. “We’ve had a busy, productive four months since launching Warner Bros. Discovery, and have more conviction than ever in the massive opportunity ahead,” the CEO said.

“We’re confident we’re on the right path to meet our strategic goals and really excel, both creatively and financially, and couldn’t be more excited about the future of our company.”

Zaslav also said the company will merge streaming services Discovery+ and HBO Max. During the quarter, the media giant posted a net loss of $3.42 billion, or a loss of $1.50 a share. The loss included over $2 billion in amortization of intangibles as well as $1 billion in restructuring and other charges, as well as nearly $1 billion in transaction/integration costs. CNN’s profits seen dipping below $1B for first time since 2016

Revenues totaled $9.83 billion. Wall Street expected a net loss of 3 cents on revenue of $11.84 billion. The company said its streaming subscriber base, which includes both Discovery+ and HBO Max, totals 92.1 million.

WarnerMedia had reported 76.8 million subscribers to HBO or HBO Max last quarter, with Discovery reporting 24 million subscribers, suggesting that the total number of subscribers fell from the first quarter.

Earlier this week, media types buzzed that Zaslav would soon roll out details that would help the company shore up $3 billion in 2023.

Investors got a glimpse at Zaslav’s plan on Tuesday when the media giant announced it would shelve its straight-to-streaming DC flick “Batgirl,” starring “In The Heights” star Leslie Grace, as well as “Scoob!: Holiday Haunt.” Cutting both films would save WBD a fortune in marketing costs and any back-end payouts.