What Awaits Warner Bros. Discovery This Earnings Season?

Core Viewpoint - Warner Bros. Discovery (WBD) is expected to report third-quarter 2024 results on November 7, with a consensus estimate for a loss of 5 cents per share and revenues projected at $9.98 billion, indicating no year-over-year change [1] Group 1: Financial Performance Expectations - The advertising revenues, which account for over 50$2.43 billion in the second quarter, with both domestic and international markets showing signs of weakness [3] - Financial pressures may lead to margin compression due to losses from high-budget film productions and significant debt obligations from the WarnerMedia-Discovery merger [4] Group 2: Direct-to-Consumer Segment - The Direct-to-Consumer (DTC) segment shows positive indicators, with 103.3 million global DTC subscribers reported in the second quarter of 2024, reflecting a sequential increase of 3.6 million [5] - The global DTC Average Revenue Per User (ARPU) grew by 4% (excluding currency effects) to $8.00, driven by domestic ad tier expansion and changes in distribution channels, although this was partially offset by growth in lower-ARPU international markets [5] - The consensus estimate for total DTC subscribers for the third quarter is pegged at 107.663 million, indicating a year-over-year increase of 13.2% [8] Group 3: Strategic Developments - A significant development is the strategic partnership with Charter Communications, integrating Max (Ad Lite) and Discovery+ content into Spectrum TV Select packages, which may support viewership growth [7] - The company's multiplatform content distribution strategy, leveraging both linear and digital platforms, could help counterbalance the challenges faced in advertising revenues [6]