Warner Bros. Discovery Earnings Tumble Amid Film Studio Struggles

Warner Bros. Discovery stumbled successful nan 2nd quarter, demonstrating nan hazard of depending heavy connected blockbuster returns from its Burbank movie studio.

Disappointing performances by “Supergirl” and “The Bride,” drove down quarterly theatrical gross by 46%. The tepid showing illustrated really nan Warner Bros. workplace has fallen since past twelvemonth erstwhile it was riding precocious astatine nan container agency pinch “Sinners,” and “A Minecraft Movie.”

Warner’s lackluster earnings, released Thursday, comes arsenic tech scion David Ellison’s Paramount Skydance remains eager to complete its $111-billion deal to bargain Warner Bros. Discovery to harvester streaming operations and nan storied movie workplace pinch Melrose Avenue’s Paramount Pictures.

Overall, profit for Warner Bros. Discovery, which besides is nan genitor of HBO, CNN, TLC and HGTV, plummeted 91% to $149 million, aliases 6 cents per share, compared to $1.6 cardinal successful nan 2nd 4th of 2025 amid nan movie studio’s blazing run.

The institution besides fell short of Wall Street expectations for revenue, which sank 11% to $8.7 billion, contempt noteworthy gains successful its HBO Max streaming business.

Warner missed having NBA games connected its TNT channel, which contributed to a 27% driblet successful advertizing to $1.4 billion. The NBA’s departure, and nan absence of nan NHL Stanley Cup finals, contributed to a 17% ratings diminution astatine Warner’s cablegram networks.

Chief Executive David Zaslav opted not to renew nan pricey hoops statement arsenic Warner has been straining to salary down debt brought connected by its past merger successful 2022. Instead, NBCUniversal picked up nan NBA arrangement.

Warner executives disclosed nan institution still is carrying astir $30 cardinal successful debt.

The company’s net revealed continued weakness successful nan cablegram television section amid user cord-cutting, which has slowed down successful caller quarters.

Still, nan channels stay a important portion of Warner’s wide gross and profit picture.

Revenue to nan world linear networks, which includes TNT, Discovery and world channels, declined 17% to $4 billion. Adjusted net earlier interest, taxes, depreciation and amortization successful that section fell 4% to $1.4 billion.

Despite nan gloomy results, Warner’s banal climbed much than 1% successful early Thursday trading to $26.25. Investors seemed heartened by news that British authorities person cleared Ellison’s projected takeover.

Britain’s Competition and Markets Authority recovered nan Paramount-Warner operation would not restrict media title successful Britain.

Warner investors are expecting much than $31 a stock should Paramount win successful its projected Warner Bros. purchase. The blockbuster acquisition has stalled amid an antitrust situation revenge past period by California Atty. Gen. Rob Bonta and 11 different authorities attorneys.

Bonta’s coalition, including prosecutors from New York, Colorado, Minnesota and Nevada, contends nan woody violates U.S. antitrust law.

“We’re assured this transaction will close,” Zaslav told analysts connected an early greeting convention call.

Earlier this week, a national judge scheduled a March 2, 2027 proceedings — months later than Paramount had hoped — to determine whether nan woody should move forward.

Paramount faces a June 4 deadline to wrap up nan acquisition — aliases salary a $7 cardinal breakup interest to Warner.

Warner’s net agleam spot came from its streaming segment, which includes HBO.

Streaming gross grew 10% to $3 cardinal arsenic nan institution continued its world rollout of HBO Max. The work benefits from Warner films, cartoons and HBO’s critically acclaimed original contented including “Euphoria,” “Hacks,” “The Gilded Age” and “A Knight of nan Seven Kingdoms,” which debuted earlier this year.

Adjusted net earlier interest, taxes, depreciation and amortization successful nan streaming section soared 75% to $512 million.

Streaming main JB Perrette said his section was bullish astir adjacent twelvemonth erstwhile HBO will present caller seasons of “The White Lotus,” “The Last of Us” and “The Pitt.”

Warner executives acknowledged their movie studio’s struggles. The institution does not break retired theatrical gross figures, but said full gross for nan movie and tv studios declined 39% to $2.3 billion.

The studios’ adjusted net earlier interest, taxes, depreciation and amortization dropped 89% to $96 million.

Zaslav conceded Warner Bros. would merchandise less films this twelvemonth than it had initially anticipated because immoderate weren’t fresh for audiences. The workplace should merchandise 14 movies this twelvemonth but plans to boost its output to 19 adjacent year.

“We’re very assured that we’re going to beryllium capable to support that larger number,” Chief Financial Officer Gunnar Wiedenfels said connected nan call.

The workplace will rebound, Zaslav said.

“Next year, we’re going to person ‘Lord of nan Rings,’ ‘Batman,’ ‘Superman,’ [and] ‘Minecraft’ too,” Zaslav said. “Our wide accuracy [is] making judge that we bring nan mobility image to nan marketplace erstwhile nan movie is ready.”

Ellison, successful his bid for Warner Bros., has promised regulators that nan mixed workplace would merchandise 30 films a twelvemonth — an magnitude that immoderate experts judge is overly ambitious.

Late Wednesday, Regal Global Entertainment Chief Executive Eduardo Acuna cited Ellison’s committedness to a beardown pipeline successful announcing his theatre chain’s support for nan Paramount-Warner Bros. merger.

“We request a thriving workplace strategy to guarantee that nan manufacture has a level from which to grow,” Acuna said successful a statement. “I judge David is sincere successful making these commitments, and he has offered to execute a consent decree to nan State AGs. These are tangible and important commitments that will use nan industry.”

Staff writer Samantha Masunaga contributed to this report.