Earnings Report: May 5, 2023

 Earnings Report: May 5, 2023

    I only have one of my holdings reporting earnings today. It is going to be a short and sweet report. I will cover what I got from the earnings release and give my opinion.

Warner Bros. Discovery, Inc. ($WBD)- Warner Bros. reported earnings before the market opened this morning. The stock saw a little boost even though the company missed on the top line and had an awful miss on the bottom line. The reason I think the stock was up was due to the overall sentiment of the market. The company is undergoing a huge restructuring plan. They had $50 million in EBITDA and 1.6 million in net adds. They feel good about the progress they have made and the trajectory they are on. It is becoming more apparent that they will be able to deleverage the balance sheet and drive free cash flow higher. Revenues saw a dip and earnings saw a 10% decrease. It looks like they were able to decrease OpEx a little bit, but still disappointing. The Ad market is really struggling right now, especially with companies tightening down on expenditures. For a company that relies a lot on advertising revenue, this is a tough position. Hopefully the restructuring keeps going as planned and we see some better quarters in the future.   

My Thoughts: This is not what I wanted to see. Ideally, I would've liked to see some sort of growth. However, we have to live with the fact that the ad market is very choppy right now. I like the restructuring the company is undergoing and the balance sheet looks a lot healthier than when it got spun off from AT&T. The executives have the right mindset with deleveraging and increasing cash flow. This will help optimize the company and make it a lot easier to run. It will also alleviate all of the worries with the liabilities. I can see this company being under construction for a while and they have to keep innovating to keep up with the fast-changing streaming industry. I got shares of this company in a spin-off from AT&T and honestly had no idea. I am just holding them for fun and seeing where they can go. I would not recommend getting into this company with a lot better options out there. Hopefully we have better results in the next few quarters.


Thank you for reading.

All information is from WBD's Earnings Release. 

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