Warner Bros. is set to announce. Discovery (WBD) reported its first quarterly profit since the $43 billion merger, as the company battles new reports about the future of streaming service HBO Max.
Here’s what Wall Street expects, according to Bloomberg Consensus estimates:
he won: $11.91 billion expected
characteristic. Earnings per share (EPS): $0.08 expected
Total DTC subscribers: 1.65 million net additions expected
Analysts expect a chaotic quarter for the broadcast conglomerate as it works to merge the two companies, while also cutting costs to improve profitability.
Guidance calls for $300 million in profit in 2022, while macroeconomic headwinds could hurt advertising revenue — a long-term risk for media companies across the board.
However, consensus estimates are for US advertising to rise 2.4% in the second quarter, aided by Turner Networks.
On the earnings call, investors will want more clarity on the platform’s direct-to-consumer strategy, as well as the fate of HBO Max which, according to several reports, hangs in the balance.
The company plans to lay off 70% of its development business, according to The Wrap magazine, which cited “several insiders.”
Sources told the outlet that CEO David Zaslav, known for his leadership style in cutting costs, will announce a major restructuring of both HBO Max and Discovery+ either during earnings results or shortly thereafter.
The Wrap explained that the move “will result in a significant layoff of HBO Max, and a significant number of executives and employees to reduce redundancies with HBO and its combined streaming service with Discovery+.”
The source claims that there will also be a tighter line between written and unwritten content.
Warner Bros. said. Discovery previously said it expects to cut costs of $3 billion over the next two years, and distribute those savings over streaming content.
At the time, questions arose about where the money might come from – layoffs could be the start of this endeavor, although critics were quick to point to CEO David Zaslav’s exorbitant salary.
According to regulatory filings, Zaslav’s compensation package for 2021 – which runs until the end of 2027 – has jumped to $246 million, which is significantly higher compared to 2020 ($37.7 million) and 2019 ($45.8 million).
Earlier Wednesday, the studio confirmed that two films scheduled to air on HBO Max, “Batgirl” starring “In the Heights” star Leslie Grace, and “Scoop!: Holiday Hunt,” have been pulled.
Warner Bros. did not respond. Immediately asked Yahoo Finance for comment on the layoff reports or its decision to pull these two films, but it did provide a statement to CNN that it owns.
“The decision not to release ‘Batgirl’ reflects the strategic shift of our leadership as it relates to the universe of DC and HBO Max,” a Warner Bros. spokesperson told the network.
“Leslie Grace is an incredibly talented actress and this decision is not a reflection of her performance,” the statement continued. “We are very grateful to the makers of the ‘Batgirl’ and ‘Scoob! Holiday Haunt’ films and their cast and hope to collaborate with everyone again in the near future.”
The DC Comics movie was nearly completed and cost the studio between $70 and $90 million to produce.
Ahead of Thursday’s earnings results, the stock was trading to the upside, up 4% at midday.
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