In its first earnings report since bringing in HBO Max and other WarnerMedia properties, Warner Bros. Discovery Inc. on Thursday missed revenue expectations by roughly $2 billion and reported a large loss due to charges related to the combination, sending its stock south. Warner Bros. Discovery
reported a second-quarter loss of $3.42 billion, or $1.50 a share, on revenue of $9.84 billion, up from $3.06 billion a year ago, before Discovery acquired the former WarnerMedia assets in a complicated spinout and merger deal with AT&T Inc.
The company did not provide adjusted earnings per share, after reporting 89 cents a share on an adjusted basis a year ago, though it did delineate nearly $4 billion in costs related to amortization of intangibles, restructuring, transaction and integration expenses and other charges.
Analysts on average expected earnings of 12 cents a share on revenue of $11.83 billion, according to FactSet. Shares dove more than 11% in after-hours trading following the release of the results, after closing with a 4.6% increase at $17.48. In a conference call that spanned more than an hour and a half Thursday afternoon, executives laid out some of the reasons that financial performance struggled, including rough times for linear networks, cancelled contracts for content sharing and a downturn in streaming growth writ large. “With respect to overall Q2 financial performance, clearly these results are neither indicative of the health of the underlying assets nor of their longer-term trajectory, but rather the fact that we’re starting from a less favorable position compared to our expectations,” Chief Financial Officer Gunnar Weidenfels said in a conference call Thursday. Chief Executive David Zaslav, in a conference call that lasted more than an hour and a half, announced that the company is exploring a free, ad-supported streaming service as a way to attract more customers to the platform. “In the spirit of optimization, once …