Warner Bros. Discovery (NASDAQ:WBD) reported a big quarterly loss even as its direct-to-consumer segment turned a profit for the first time ever.
The company also expects the DTC, or streaming, business to be profitable for 2023, a year ahead of its expectations, CEO David Zaslav said in an earnings release Friday morning.
First-quarter revenue was $10.7 billion, roughly in line with analysts’ estimates. The company reported a net loss of $1.1 billion and adjusted EBITDA of $2.6 billion.
Revenue was $10.7 billion vs. $10.78 billion expected, the loss per share having been 44 cents vs. earnings of one cent expected.
Like all major media companies, Warner Bros. Discovery is pivoting to streaming video as millions of Americans cancel traditional pay TV each year. The company ended the quarter with 97.6 million streaming subscribers, up 1.6 million from last quarter.
The direct-to-consumer segment turned a profit of $50 million for the quarter.
Warner Bros. Discovery lost $930 million in free cash flow in the quarter, largely due to interest rate and sports media rights payments,
The company ended the fourth quarter with $49.5 billion in debt on its balance sheet, and $2.6 billion in cash on hand. Warner Bros. Discovery is attempting to boost free cash flow by cutting back on spending, including laying off thousands of employees last year, to reduce its hefty debt load.
WBD shares retreated 29 cents, or 2.4%, to $12.04.
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