Warner Bros. Discovery fell short of Wall Street expectations in the second quarter, as Supergirl and the lack of the NBA dragged total revenue down 11% to $8.7 billion.
Analysts had projected $9.2 billion in revenue. Diluted earnings per share of 6 cents topped estimates of a loss of 10 cents a share.
The company reported the quarterly financials with its $110 billion merger with Paramount in legal limbo. The attorneys general of 12 states, as well as the Writers Guild of America, have filed a lawsuit seeking to block the deal on antitrust grounds. A trial has been scheduled for March 2027.
Streaming proved a bright spot, with total revenue up 10% to $3.1B and EBITDA jumping 75% to $512 million. Flagship streamer HBO Max, which has recently expanded to key international territories, was paced by titles like Euphoria, House of the Dragon, Hacks and The Pitt.
The studio division faced tough comparisons with the year-ago period, which featured hits like A Minecraft Movie, Sinners, and Final Destination Bloodlines. Revenue tumbled 39% to $2.3 billion and EBITDA plummeted 89% to $96 million. Supergirl grossed just $126 million worldwide, the lowest for any DC release since Catwoman in 2004.
Total advertising revenue plunged 22% from the year-ago period to settle at $1.7 billion. The main culprit was the absence of the NBA. After nearly 40 years of broadcasting the league’s games, WBD did not reach a deal to extend its rights, with NBCUniversal taking its place as a primary partner.
The ad story marred the quarterly performance of the Global Linear Networks division, whose revenue slid 17% to $3.99 billion. Adjusted EBITDA was off 4% to $1.4 billion.
The quarterly numbers followed Tuesday’s earnings report from Paramount, which featured some updated comments about the WBD merger. Paramount CEO David Ellison said he is “absolutely open” to discussing a potential settlement of the antitrust suit, but he also said the company believes it “will win in court.”
