WarnerBros. Discovery posted weaker-than-expected second quarter earnings Thursday and announced the merger of its two most popular streaming services would be completed by next summer.
The media behemoth reported its earnings for the first time since merging to combine the properties of Discovery and WarnerMedia — which include HBO, CNN, Warner Bros., HGTV and TLC.
Shares tumbled nearly nearly 10% in after-hours trading.
WBD CEO David Zaslav has come under fire for his cost-cutting decision since the merger — including scrapping the already-completed “Batgirl” movie.
He announced that more layoffs will be coming and said HBO Max and Discovery+ will be merged next summer.
“We’ve had a busy, productive four months since launching Warner Bros. Discovery, and have more conviction than ever in the massive opportunity ahead,” Zaslav said. “We’re confident we’re on the right path to meet our strategic goals and really excel, both creatively and financially, and couldn’t be more excited about the future of our company.”
During the quarter, the media giant posted a net loss of $3.42 billion, or a loss of $1.50 a share. The loss included over $2 billion in amortization of intangibles as well as $1 billion in restructuring and other charges, as well as nearly $1 billion in transaction/integration costs.
Revenues totaled $9.83 billion. Wall Street expected a net loss of 3 cents on revenue of $11.84 billion.
The company said its streaming subscriber base, which includes both Discovery+ and HBO Max, totals 92.1 million.
WarnerMedia had reported 76.8 million subscribers to HBO or HBO Max last quarter, with Discovery reporting 24 million, but those reports used an older definition of what a subscriber is, the company said.
The new numbers do not include “10 million legacy Discovery non-core subscribers and unactivated AT&T mobility subscribers from the Q1 subscriber count,” the company said.
WBD said that when using its new definition of direct-to-consumer subscribers, the company added 1.7 million subscribers from Q1 to Q2.
Earlier this week, media types buzzed that Zaslav would soon roll out details that would help the company shore up $3 billion in 2023.
Investors got a glimpse at Zaslav’s plan on Tuesday when the media giant announced it would shelve its straight-to-streaming DC flick “Batgirl,” starring “In The Heights” star Leslie Grace, as well as “Scoob!: Holiday Haunt.”
Cutting both films saves WBD a fortune in marketing costs and any back-end payouts.
There have also been rampant rumors that there would be some fallout from the merger of the firm’s two biggest streaming services, HBO Max and Discovery+. On Wednesday, Hollywood trade The Wrap reported that the company plans to lay off 70% of its development business.
“We will clearly take swift and decisive actions on certain items, as you saw on CNN+ last week,” Zaslav told investors on an earnings call in April, vowing to not “overspend.”
Zaslav soon brought in Chris Licht, a former executive producer on “The Late Show with Stephen Colbert,” to replace former CNN chief executive Jeff Zucker, who resigned. Top brass is focused on building up CNN’s flailing ratings while reorienting from opinion-based reporting back to fact-based journalism.