Warner Bros. Discovery stock fell after Q4 earnings report

Warner Bros. Discovery fell 9% as markets opened Friday morning following the company's Q4 earnings report that showed financial progress for its Max streaming service, but weakness in key areas including ad sales.

Warner Bros. Discovery shares fell 9% in premarket trading at the end of an hour-long conference call with Wall Street analysts. Shares closed Thursday at $9.56 and fell to $8.75 shortly after 9 a.m. ET. The stock was down 10% after two minutes of formal trading as markets opened at 9:30 a.m. ET.

WB Discovery CEO David Zaslau sought to reassure analysts that the company's long-term outlook remains strong. He stressed that the new regime that took office in April 2022 is still working through the problems they inherited. Revenue for the quarter fell 7% — due to lost TV revenue due to strike-induced production delays last year — while adjusted earnings fell 5%, dragged by a 30% adjusted EBITDA loss at Warner Bros. studios and 11 % decline for the linear networks group of channels: CNN, TNT, Discovery, Food Network, HGTV and other channels. The streaming unit that owns Max posted an adjusted EBITDA loss of $55 million, marking a $162 million year-over-year improvement from the unit's performance in Q4 2022.

Related content: Warner Bros. Discovery narrows Q4 loss despite 14% decline in ad revenue

“We've worked very hard to focus on where we are in terms of getting a healthy balance sheet, paying down debt, getting leverage below four times, spending cash and driving free cash flow,” Zaslau said. “So we've positioned this company to be a healthy company now, with a great multi-directional leadership team.”

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WB Discovery shares are down 18% year to date and 46% over the past 12 months.

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