Warner Bros. Discovery dips in down market, as earnings report turns the page
Warner Bros. Discovery (NASDAQ:WBD) has come out of today's open 6.6% lower - with a sinking broader market weighing on the stock after a first-quarter earnings report generally viewed positively, but with some bumps on the streaming side.
The results naturally say more about what the company used to be than what it's becoming, as they don't include the WarnerMedia business acquired on April 8.
Total revenue rose 13% to $3.16 billion, with international results leading the way. U.S. Networks revenues rose 7% to $1.93 billion, while International Networks rose 25% to $1.23 billion - and rose 30% excluding the effects of foreign exchange on the results.
Total adjusted OIBDA rose 23% to $1.03 billion, and net income available to the company more than tripled, to $456 million.
On the subscriber side, the company ended Q1 (again, before the HBO Max acquisition) with 24 million direct-to-consumer subscribers, up 2 million since the end of the fourth quarter.
Cash from operations rose 20% to $323 million, and free cash flow rose 33% to $238 million, thanks to the expanded OIBDA, offset somewhat by higher spending on content.
U.S. Networks revenue breakout: Advertising, $1.03 billion (up 5%); Distribution, $886 million (up 11%); Other, $21 million (down 30%). International Networks revenue breakout: Advertising, $457 million (up 5%); Distribution, $536 million (up 4%).
Wells Fargo was positive in reaction, noting the solid beats on EBITDA and free cash flow, but observing that forward commentary on the company's future would be more important than this last real report on the old Discovery. It's looking toward more commentary on the ad market as well as updated guidance.
The bank has an Overweight rating and price target of $42 - now implying 107% upside.
Among the rapid changes taking place at Warner Bros. Discovery of late: The quick shuttering of streaming news service CNN+ after less than a month of operations.