Warner Bros. Discovery’s (WBD) stock is down 12% after the entertainment company reported a $9.1 billion U.S. write-down on its TV networks and missed analysts’ estimates for its second-quarter financial results.
The New York City-based company announced a loss per share of $0.36 U.S. which was greater than a loss of $0.22 U.S. expected on Wall Street.
Revenue in the quarter totaled $9.70 billion U.S., which missed the $10.07 billion U.S. that was the consensus forecast among analysts.
Warner Bros. Discovery also announced a $9.10 billion U.S. write-down or impairment charge due to a re-evaluation of its TV networks value.
The market value of the company’s traditional TV channels continues to decline as customers and advertisers migrate to streaming platforms and online content.
Warner Bros. Discovery also continues to struggle with a big debt load caused from the 2022 merger of the Warner Bros. film studio and Discovery television network.
During the second quarter, the company paid down $1.8 billion U.S. of debt. As of June 30, it had $41.40 billion U.S. of gross debt on its balance sheet, along with $3.60 billion U.S. of cash.
Revenue for Warner Bros. Discovery’s traditional TV networks, which include TBS, TNT, Discovery and TLC, declined 8% to $5.27 billion U.S. during Q2.
The company also recently lost its right to broadcast future NBA basketball games to streaming rival Amazon Prime (AMZN).
Despite those difficulties, Warner Bros. Discovery’s own streaming platform called “Max” showed signs of growth in Q2.
The company said it added 3.6 million net new subscribers to Max during the quarter, bringing its total number of global streaming customers to 103.3 million.
Advertising revenue for streaming rose 99% year-over-year in the quarter, driven by higher domestic engagement on Max and growth in the streaming service’s ad-supported tier.
Warner Bros. Discovery is in the process of forming streaming bundles with Disney+ (DIS) and Hulu, as well as a sports bundle with ESPN and Fox that are set to launch this autumn.
Prior to today (Aug. 8), the stock of Warner Bros. Discovery had declined 47% over the last 12 months and was trading at $7.71 U.S. per share.
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