Warner Bros. Discovery WBD is scheduled to report first-quarter 2026 earnings on May 6.
The Zacks Consensus Estimate for first-quarter revenues is currently pegged at $8.95 billion, indicating a marginal 0.36% year-over-year decline.
The consensus mark for loss is pegged at 9 cents per share, unchanged over the past 30 days. This represents a sharp year-over-year improvement from a loss of 18 cents.
In the last reported quarter, the company delivered a negative earnings surprise of 600%. The company’s earnings beat the Zacks Consensus Estimate once in the trailing four quarters and missed the same in the remaining three, with an average negative surprise of 51.56%.
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 WBD before the announcement.
Key Factors to Note for WBD’s Q1 Results
Warner Bros. Discovery’s core financial performance reflects notable deterioration heading into the first quarter of 2026. In the prior quarter, total revenues declined about 6-7% year over year, with broad-based weakness across advertising, content and distribution, while adjusted EBITDA dropped nearly 20%, primarily due to softness in the Global Linear Networks business. Cash generation also weakened significantly, with free cash flow falling 43% amid lower operating cash flow and substantial separation-related costs. With these pressures persisting and no clear near-term offsets indicated, Warner Bros. Discovery is likely to have experienced continued revenue softness, margin compression and cash flow strain in the quarter under review.
Warner Bros. Discovery continues to face structural pressure from the ongoing decline in its linear television business, which remains a key revenue driver. As observed in the fourth quarter of 2025, distribution revenues fell as growth in streaming subscribers was more than offset by continued domestic linear pay-TV subscriber losses, while advertising revenues declined due to weakening linear audience trends. The company also highlighted persistent industry headwinds tied to shrinking linear viewership and softer advertising demand. Given these entrenched trends and their direct impact on both distribution and ad revenues, the linear TV decline is likely to have remained a major drag on performance in the first quarter of 2026.
WBD's high leverage is continuously limiting its financial flexibility and increasing its earnings risk. The company ended 2025 with approximately $29 billion in net debt and leverage of around 3.3x, reflecting a sizable debt burden relative to cash generation. At the same time, weakening free cash flow and ongoing restructuring and transaction-related costs have added further strain on liquidity. Such a capital structure limits the company’s ability to invest aggressively or absorb operational volatility. Consequently, these financial constraints are likely to have continued pressuring cash flows, flexibility and overall performance in the to-be-reported quarter.
However, the company’s strong content slate is emerging as a key growth driver, supported by a mix of high-performing originals and franchise-driven programming across HBO and HBO Max. Early 2026 releases such as The Pitt and Industry delivered 30% and 50% audience growth, while A Knight of the Seven Kingdoms is averaging over 24 million viewers per episode, reflecting strong engagement trends. Additionally, a robust pipeline of returning hits and new premieres has strengthened platform stickiness and viewership momentum. This sustained content strength is expected to have boosted subscriber engagement and monetization in the first quarter of 2026.
What Our Model Says About WBD Stock
Our proven model does not conclusively predict an earnings beat for WBD this time around. Per 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 is not the case here.
WBD currently has an Earnings ESP of 0.00% and a Zacks Rank #5 (Strong Sell). You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Stocks to Consider
Here are some companies worth considering, as our model shows that they have the right combination of elements to beat on earnings in their upcoming releases:
Hasbro Inc. HAS currently has an Earnings ESP of +5.81% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
HAS shares have gained 14.6% in the year-to-date period. HAS is set to report first-quarter 2026 results on May 11.
Corsair Gaming CRSR currently has an Earnings ESP of +1.89% and a Zacks Rank #3.
CRSR shares have appreciated 15.7% in the year-to-date period. CRSR is slated to report first-quarter 2026 results on May 7.
Six Flags Entertainment Corporation FUN currently has an Earnings ESP of +13.34% and a Zacks Rank #3.
FUN shares have returned 15.1% in the year-to-date period. FUN is slated to report first-quarter 2026 results on May 7.
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Free: See Our Top Stock And 4 Runners UpHasbro, Inc. (HAS) : Free Stock Analysis Report
Warner Bros. Discovery, Inc. (WBD) : Free Stock Analysis Report
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Corsair Gaming, Inc. (CRSR) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
