Warner Bros Discovery results miss expectations ahead of potential sale or split

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(Reuters) -Warner Bros Discovery posted a bigger-than-expected quarterly loss on Thursday, as lackluster growth in its streaming unit and persistent declines in its cable TV business more than offset a strong showing from the media giant’s studio division.

After a strong quarter last year that saw a boost from the 2024 Paris Olympics and the first season of crime drama series “The Penguin”, WBD’s streaming business – home to the HBO Max and Discovery+ platforms – suffered from a lack of new seasons or shows.

The company <WBD.O> reported 2.3 million global streaming subscriber additions for the third quarter, missing Visible Alpha estimates of 2.75 million. Shares fell 1% premarket.

NO DEADLINE FOR SALE OR SPLIT

WBD is evaluating options including selling itself or in parts. The company said on Thursday it would also consider an alternative structure that would involve selling its studio and streaming businesses, while spinning off its global networks division.

“There is no deadline or definitive timetable regarding this strategic review process,” WBD said, adding executives will not be answering questions on the matter in its earnings call.

WBD’s legacy cable TV business continued to struggle with weak demand amid cord-cutting. The unit posted a 22% decline in revenue, falling sharply after a strong news cycle on CNN and the Olympic Games boosted viewership last year.

In contrast, Warner Bros studio put in a strong performance as new releases including “Superman”, “Weapons” and “The Conjuring: Last Rites” dominated the box office. The segment reported a better-than-expected 24% jump in revenue to $3.32 billion.

For the fourth quarter, the absence of the National Basketball Association (NBA) games, which were live-streamed on HBO Max, would have a negative impact of 300 basis points on the streaming unit’s advertising revenue, the company said. The first half of 2026 would see an even greater impact.

The company also expects a related hit of 400 basis points to ad revenue in its cable network unit in the fourth quarter.

It reported a loss of 6 cents per share, wider than analysts’ estimates for a 4-cent loss, according to data compiled by LSEG.

Total revenue fell 6% to $9.05 billion in the September quarter, compared with analysts’ estimate of $9.15 billion.

(Reporting by Deborah Sophia in Bengaluru; Editing by Anil D’Silva and Maju Samuel)