Warner Bros. Discovery stock plummeted by more than 15% following the announcement of ongoing weakness in the ad market, causing concerns about the company’s visibility for 2024. The company’s CFO, Gunnar Wiedenfels, pointed to the possibility of continued sluggish ad trends impacting the complexity of 2024. This news comes after Warner Bros. Discovery previously announced a restructure of its advertising sales division in response to weak ad demand earlier in the summer. Network advertising revenue also dropped by 13% in the third quarter, contributing to the stock’s decline.
Despite the challenges in the ad market, Warner Bros. Discovery reported a loss of $0.17 a share in the third quarter, wider than expected but an improvement from the prior year’s loss. Revenue of $9.98 billion met consensus estimates and increased 1% excluding foreign exchange compared to the previous year. Additionally, the company’s total streaming subscribers for the third quarter were 95.1 million, with a decrease of 700,000 global subscribers since the end of the second quarter. However, streaming losses improved with WBD reporting direct-to-consumer adjusted EBITDA of $111 million in the third quarter, a $745 million year-over-year improvement.
Overall, Warner Bros. Discovery faces challenges in the ad market, as seen in the significant stock decline and the struggle to achieve target leverage range by the end of 2024. Despite the ad-related setbacks, the company demonstrated strength in other areas, such as revenue and streaming subscribers, showcasing its ability to navigate a challenging business environment.