Warner shares slump as Disney benefits

Whereas some people are only familiar with a hole of losses, others are witnessing for the first time how their streaming platform displays positive data.

We have heard about the significantly different paths that two of the most prominent names in the audiovisual industry today (perhaps the two most prominent names along with Netflix) have taken almost simultaneously: On the stock market, Warner Bros. Discovery has experienced a staggering decline of 12.7%, while Disney has reported profits of 49 million dollars, putting a stop to a cycle of two years of constant losses. An examination of the factors that led to each of these outcomes can assist us in comprehending the current state of affairs in the industry.

Warner is falling apart. According to Variety, the decrease in the share price of Warner Discovery can be called historic. The firm has seen a write-down of $9.1 billion, which is not a cash loss in the traditional sense but rather a non-cash charge for the gap between WBD’s market capitalization and the book value of the networks sector. The loss of value of the company’s pay-TV section, which is where a significant portion of the company’s business is located, is a significant contributor to the problem. The value of the company’s shares hit $6.73 per share after the announcement of the financial results for the second fiscal quarter, which caused the dip to take place. At the moment, the price of a share of the company’s stock has plateaued somewhere around $7.

This is a bad streak. Since quite some time ago, Warner has not received any positive financial news. During the middle of June, the company’s shares had already begun to decline to $6.99; a year earlier, the shares were worth forty percent more than they are now. The market valuation of the company, which is currently somewhere around $17.2 billion, has been reduced by $1.6 billion as a result of this dip.

Again, in order to have an indication of the decline in the value of the company, all we need to do is compare it to the market value of Warner in 2022, when Discovery acquired WarnerMedia, which was $50 billion. For the current quarter, we are talking about a total loss of ten billion dollars in terms of net income.

There are some causes. According to Warner, the following are some of the likely reasons for this decline: The fiscal profits for the second quarter have been significantly lower than anticipated; in addition to this, the announcement of the loss of NBA broadcasting rights beginning in 2025 or the bad results of advertising in the linear television division of the corporation have also contributed to this situation. Food Network, HGTV, Discovery, CNN, TNT, TBS, and Cartoon Network/Adult Swim are some of the networks that fall under this category of the company’s operations.

There were a number of terrible years. Despite the fact that David Zaslav, the Chief Executive Officer of Warner Discovery, has pledged to take steps to improve these results (which do not only have a negative side: HBO and Max have grown 3.6 million subscribers, adding 103.3 globally, which they attribute to the global launch of Max and Discovery +), the reality is that the company has been giving the starting signal for a series of cuts for a couple of years. The cancellation of ‘Batgirl’ was the turning point, which was followed by a series of unpopular decisions and trench economics. These include the following: an increase in the number of finished and cancelled films, the continuous licensing of series and films to other platforms, which no longer have an exclusive presence on Max, massive layoffs, and most recently, the closure of a brand that is as iconic as Cartoon Network.

On the other hand, Disney is moving on the opposite path. Meanwhile, the absolutely enormous success of “Inside Out 2,” which is already the highest-grossing animated film of all time, is paying off favorably for Disney (added to the more modest but also notable success of “Kingdom of the Planet of the Apes”), which has obtained a quarterly report with unusual profits. In addition, “Inside Out 2” is already the highest-grossing animated film of all time. Disney Plus has finally managed to pull itself out of the red for the first time since its inception. Despite this, the company is still operating in a challenging environment: with the exception of ESPN, none of its television platforms have achieved spectacular achievements.

The stats for Disney. During the quarter, Disney’s total sales increased by 4% to reach $23.16 billion, while the company’s operating income increased by 19% to reach $4.23 billion. According to the company’s chief executive officer, “This has been a strong quarter for Disney, driven by excellent results in our Entertainment segment at both the box office and direct-to-consumer levels , as we achieved profitability in our combined streaming businesses for the first time.” As a result of the fact that “Deadpool and Wolverine” will be featured at the box office during the fourth quarter of the fiscal year, revenue expectations for that period are also extremely favorable.

More people signing up. There is no doubt that viewers of the first installment, which has been viewed one hundred million times all over the world, are responsible for a significant portion of the new 1.3 million subscribers that Disney+ has obtained this quarter. The success of “Inside Out 2” has not only caused a stir at the box office, but it has also caused a significant amount of excitement. The perspective of the company for the fourth fiscal quarter is positive, and it is anticipated that there will be an increase in subscriptions (which will undoubtedly be prompted by the forthcoming release of “Inside Out 2”), despite the fact that the price increase in rates that has already been announced may take place.

Warner shares slump as Disney benefits

By triji

Related Post

Shogun’ and Disney change the game

James Cameron buys ‘Ghosts Of Hiroshima’ book

In two days, Broncano and ‘La revuelta

Leave a Reply Cancel reply

You Missed

Shogun’ and Disney change the game

James Cameron buys ‘Ghosts Of Hiroshima’ book

In two days, Broncano and ‘La revuelta

‘Birds of Prey’: in a different position than Marvel.