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The Zacks Consensus Estimate for loss has narrowed by a penny to 10 cents per share in the past 30 days. The consensus mark for revenues is pegged at $10.37 billion, indicating 0.81% growth year over year.
Find the latest EPS estimates and surprises on Zacks Earnings Calendar.
WBD’s earnings beat the Zacks Consensus Estimate once in the last four quarters and missed thrice, delivering an average negative surprise of 525.45%.
Warner Bros. Discovery, Inc. Price and EPS Surprise
Let’s see how things have shaped up for this announcement.
Factors to Consider
Warner Bros. Discovery is approaching its fourth-quarter 2024 earnings with mixed signals for investors, suggesting a "hold" stance may be prudent until more clarity emerges about the company's transformation efforts.
The fourth quarter is likely to have seen continued streaming subscriber growth for Max following the strong third-quarter performance where the platform added 7.2 million subscribers. However, ongoing linear TV subscriber losses probably remained a significant headwind, continuing to offset gains in the streaming business. WBD's Studios segment might have seen modest improvement following management's third-quarter commentary that Studio EBITDA would be "up a few hundred million dollars year-over-year" in the fourth quarter, though Joker 2's underperformance is likely to weigh on results.
Several significant developments during the to-be-reported quarter suggest that WBD is actively addressing its structural challenges. The company announced a major reorganization in December, dividing operations into two core divisions: Global Linear Networks and Streaming & Studios. This restructuring aims to improve operational focus while potentially positioning these units for future strategic options, including possible separation.
The renewal of content distribution agreements with Comcast for Xfinity and Sky customers across the United States, United Kingdom, and Ireland should provide some revenue stability for WBD's valuable content portfolio. Additionally, the announcement of a comprehensive 11-year media partnership with the NBA resolved previous disputes and secured important sports rights globally, though the financial impact won't be felt immediately.
On the innovation front, WBD enhanced Max's advertising technology with Shop with Max and Moments features, leveraging AI to improve viewer engagement and advertiser effectiveness. This could help boost advertising revenues, which saw a 51% ex-FX increase in the Direct-to-Consumer segment in the third quarter.
Investors should watch for updates on the company's debt reduction progress, which remains crucial given WBD's 4.2x net leverage ratio as of the third quarter. The direct-to-consumer segment's path to profitability, international Max expansion plans, and any commentary on potential asset sales or strategic options will be key focus areas. Given the ongoing industry disruption and WBD's transformation efforts, prudent investors might consider waiting for more clarity from the fourth-quarter results and 2025 outlook before adjusting positions.
What Our Model Indicates
According to the Zacks model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here.
WBD has an Earnings ESP of -158.07% and a Zacks Rank #3 at present. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks to Consider
Here are some stocks worth considering, as our model shows that these have the right combination of elements to beat on earnings this season.
Image: Bigstock
Warner Bros. Discovery to Report Q4 Earnings: What's in Store?
Warner Bros. Discovery (WBD - Free Report) is slated to report fourth-quarter 2024 results on Feb. 27.
The Zacks Consensus Estimate for loss has narrowed by a penny to 10 cents per share in the past 30 days. The consensus mark for revenues is pegged at $10.37 billion, indicating 0.81% growth year over year.
Find the latest EPS estimates and surprises on Zacks Earnings Calendar.
WBD’s earnings beat the Zacks Consensus Estimate once in the last four quarters and missed thrice, delivering an average negative surprise of 525.45%.
Warner Bros. Discovery, Inc. Price and EPS Surprise
Warner Bros. Discovery, Inc. price-eps-surprise | Warner Bros. Discovery, Inc. Quote
Let’s see how things have shaped up for this announcement.
Factors to Consider
Warner Bros. Discovery is approaching its fourth-quarter 2024 earnings with mixed signals for investors, suggesting a "hold" stance may be prudent until more clarity emerges about the company's transformation efforts.
The fourth quarter is likely to have seen continued streaming subscriber growth for Max following the strong third-quarter performance where the platform added 7.2 million subscribers. However, ongoing linear TV subscriber losses probably remained a significant headwind, continuing to offset gains in the streaming business. WBD's Studios segment might have seen modest improvement following management's third-quarter commentary that Studio EBITDA would be "up a few hundred million dollars year-over-year" in the fourth quarter, though Joker 2's underperformance is likely to weigh on results.
Several significant developments during the to-be-reported quarter suggest that WBD is actively addressing its structural challenges. The company announced a major reorganization in December, dividing operations into two core divisions: Global Linear Networks and Streaming & Studios. This restructuring aims to improve operational focus while potentially positioning these units for future strategic options, including possible separation.
The renewal of content distribution agreements with Comcast for Xfinity and Sky customers across the United States, United Kingdom, and Ireland should provide some revenue stability for WBD's valuable content portfolio. Additionally, the announcement of a comprehensive 11-year media partnership with the NBA resolved previous disputes and secured important sports rights globally, though the financial impact won't be felt immediately.
On the innovation front, WBD enhanced Max's advertising technology with Shop with Max and Moments features, leveraging AI to improve viewer engagement and advertiser effectiveness. This could help boost advertising revenues, which saw a 51% ex-FX increase in the Direct-to-Consumer segment in the third quarter.
Investors should watch for updates on the company's debt reduction progress, which remains crucial given WBD's 4.2x net leverage ratio as of the third quarter. The direct-to-consumer segment's path to profitability, international Max expansion plans, and any commentary on potential asset sales or strategic options will be key focus areas. Given the ongoing industry disruption and WBD's transformation efforts, prudent investors might consider waiting for more clarity from the fourth-quarter results and 2025 outlook before adjusting positions.
What Our Model Indicates
According to the Zacks model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here.
WBD has an Earnings ESP of -158.07% and a Zacks Rank #3 at present. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks to Consider
Here are some stocks worth considering, as our model shows that these have the right combination of elements to beat on earnings this season.
TKO Group Holdings, Inc. (TKO - Free Report) currently has an Earnings ESP of +68.89% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
TKO shares have surged 88.1% in the trailing 12 months. It is set to report its fourth-quarter 2024 results on Feb. 26.
IonQ (IONQ - Free Report) currently has an Earnings ESP of +35.14% and a Zacks Rank #3.
IONQ shares have skyrocketed 182.4% in the trailing 12 months. It is slated to report its fourth-quarter 2024 results on Feb. 26.
Opera Limited (OPRA - Free Report) has an Earnings ESP of +8.70% and a Zacks Rank #3 at present.
OPRA shares have jumped 76.8% in the trailing 12 months. Opera Limited is scheduled to report its fourth-quarter 2024 results on Feb. 27.