Warner Bros. Discovery
stock dropped 19% on Wednesday, its worst drop in more than two years. The company reported a wider-than-expected loss and a decline in television revenue amid Hollywood strikes and a difficult advertising market.
Warner Bros. stock (ticker: WBD) was the worst performer in the
S&P 500
on Wednesday. At $9.40, shares were at their lowest level since Dec. 28, 2022, according to Dow Jones Market Data. The drop was the biggest percentage drop since March 26, 2021, when shares fell 28%.
Shares of competitor
Paramount Global
(PARA) fell 7.9% to $11.82 on Wednesday, too.
Warner Bros. reported a third-quarter loss of 17 cents a share on revenue of $9.98 billion. Analysts surveyed by FactSet had expected the entertainment company to report a loss of 9 cents a share on revenue of $9.97 billion. In the same period last year, Warner Bros. posted a loss of 95 cents a share on revenue of $9.82 billion.
The company reported content revenue for its networks segment of $215 million, a 22% decline from the same period last year.
“TV revenue declined significantly primarily due to certain large licensing deals in the prior year and the impact of the WGA and SAG-AFTRA strikes,” Warner Bros. said in a press release.
SAG-AFTRA actors have been on strike since July with workers demanding higher pay and residuals, as well as more concrete protections against artificial intelligence. Hollywood writers ended their strike at the end of September.
Total advertising revenue for the quarter of $1.8 billion was down 12% from the previous year, as the ad market remained soft, Warner said.
The company also reported that global direct-to-consumer subscribers declined by 700,000 to 95.1 million in the quarter. This comes as Warner announced changes to its streaming services, including the launch of the Bleacher Report Sports Add-On to streaming service Max and offering CNN Max to streaming subscribers.
Write to Angela Palumbo at angela.palumbo@dowjones.com
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