Blockbuster hit “Barbie” brought in a record $1.5 billion for Warner Bros. Discovery, but the company still reported a $417 million loss for the quarter that was bigger than Wall Street’s forecasts.
The company, however, reported a narrow profit when taking into account adjustments for certain items, including interest, taxes, depreciation, and amortization.
Warner Bros. Discovery, the parent company of CNN, needed the revenue boost from “Barbie” to achieve a narrow 2% increase in sales. The company’s revenue came in at just under $2 billion for the quarter.
The strong box office showing offset a $235 million drop in advertising revenue in WBD’s networks unit, representing a 12% drop. The company also contended with an unspecified drop in revenue that it attributed to the strikes held by the Writers Guild of America and SAG-AFTRA, the union representing 160,000 actors that halted most television and movie production for months. Although the writers' strike has been settled, SAG-AFTRA remains on strike, and negotiations between the union and studios and streaming services continue
The company said in September it expected a hit to earnings of up to $500 million for the full year from the strike. CFO Gunnar Wiedenfels warned investors Wednesday that “there is a real risk at this point that some negative financial impact of the strike will extend into 2024 to some extent.” There is also a “possibility of continued sluggish advertising trends” into 2024, he said.
CEO David Zaslav said the strike had “compelled us to delay some releases” and gave the company “one of our lightest original content schedules in years” in the third quarter. However, the company did not give any updated dollar estimates for the cost of the strike to the company.
