Warner Bros. Discovery (WBD) Q1 Earnings Beat Estimates

Warner Bros. Discovery WBD reported first-quarter 2022 earnings of 69 cents per share, up 228.6% year over year.

Revenues increased 13.4% year over year to $3.159 billion, which beat the Zacks Consensus Estimate by 0.64%.

The consensus mark for earnings was pegged at 56 cents per share.

Top-Line Details

Advertising revenues increased 4.7% year over year to $1.48 billion. Distribution revenues increased 8.5% year over year to $1.42 billion. Other revenues were $255 million compared with $67 million reported in the year-ago quarter.

U.S. Networks (61.2% of revenues) revenues increased 7% on a year-over-year basis to $1.93 billion. Advertising revenues increased 4.6%, driven by the performance of next-gen advertising products like Discovery+ and Go. Distribution revenues rose 11.3%, primarily driven by growth of Discovery+ subscribers throughout 2021, while linear affiliate revenues were also up year over year as rate increases continued to outpace subscriber declines.

Subscribers of Warner Bros. Discovery’s fully-distributed networks were 4% lower on a year-over-year basis. Total portfolio subscribers declined 4% year over year.

International Networks revenues (38.9% of revenues) increased 24.5% year over year to $1.23 billion. Advertising revenues were up 5.1%, partly helped by the Beijing Winter Olympic Games and underlying momentum in certain key markets like the U.K., Germany and Latin America. Distribution Revenues were up 4.3%, driven by the continued growth of Discovery+.

Warner Bros. Discovery ended the first quarter with 24 million paying direct-to-consumer subscribers.

Warner Bros. Discovery, Inc. Price, Consensus and EPS Surprise

Warner Bros. Discovery, Inc. price-consensus-eps-surprise-chart | Warner Bros. Discovery, Inc. Quote

Operating Details

In the first quarter, total operating expenses increased 17% year over year to $2.81 billion. Selling, general and administrative (SG&A) expenses declined by 1% from the year-ago quarter’s levels to $1.04 billion.

Adjusted operating income before depreciation & amortization (“OIBDA”) increased 22.7% from the year-ago quarter’s levels to $1.027 billion.

U.S. Networks adjusted OIBDA increased 24.5% from the year-ago quarter’s levels to $1.025 billion. International Networks’ adjusted OIBDA rose 6.6% year over year to $161 million.

GAAP operating income declined 10.9% year over year to $353 million.

Balance Sheet

As of Mar 31, 2022, cash & cash equivalents were $4.16 billion compared with $3.91 billion as of Dec 31, 2021.

Zacks Rank & Stocks to Consider

Currently, Warner Bros. Discovery carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the Consumer Discretionary sector include Funko FNKO and Vitru Limited VTRU, each carrying a Zacks Rank #1 (Strong Buy), and Golden Entertainment GDEN, carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Funko, Golden Entertainment and Vitru Limited are scheduled to report their quarterly results on May 5, May 5 and May 16, respectively.

The Zacks Consensus Estimate for Funko’s first-quarter 2022 earnings is pegged at $0.20 per share, down by 6 cents over the past 30 days.

The Zacks Consensus Estimate for Vitru’s first-quarter 2022 earnings is pegged at $0.20 per share, down by 6 cents over the past 30 days.

The Zacks Consensus Estimate for Golden Entertainment’s first-quarter 2022 earnings is pegged at $0.49 per share, unchanged over the past 30 days.

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