With the end of two industry-shaking strikes, Hollywood’s biggest companies are hopeful for their financial futures. Boardroom breaks down the recent Hollywood earnings reports.
Amid a bustling earnings season, key players in the entertainment industry released their quarterly results this week.
As of this writing, both the writers and actors strikes are officially over, sparking hope in the front offices of Hollywood studios. However, the impact of the historic work stoppages cannot be overlooked as the Fall television and film lineups were deeply impacted.
Collectively, the reports showed mixed results, as the impact of the strikes certainly hit the industry’s books. The sluggish ad market also impacted overall revenue opportunities for all of the major studios. But some studios posted positive results amid a surging subscriber market and a promising release lineup.
Let’s take a closer look at Disney, Paramount, and Warner Bros. Discovery’s bottom lines with Boardroom’s Hollywood earnings report update:
Hollywood Studio Earnings Overview
Paramount led the way for the Hollywood giants. The company revealed its earnings last week, posting higher-than-expected outcomes and sparking the confidence of Wall Street. The success was driven by a number of factors, including its theatrical division, which saw success with Mission Impossible: Dead Reckoning Part One and Teenage Mutant Ninja Turtles: Mutant Mayhem, and the addition of nearly 3 million subscribers to Paramount+.
Key takeaways from Paramount’s recent earnings report:
- Shares were up 30 cents, as compared to industry projections of 10 cents.
- Revenue came up just above estimates ($7.13 billion as compared to a forecast of $7.099 billion)
- Profits came in at $295 million, up 28% year-over-year.
- The company finalized its sale of Simon & Schuster to private equity firm KKR for $1.62 billion just prior to the earnings report’s release.
- The company’s stock price boomed in the days following, posting double-digit increases in the two days following the report.
Bob Iger’s second dance at the House of Mouse continues to go just as choreographed. Amid ongoing belt-tightening, Disney is headed back on its desired financial track. The report signaled the first one that utilized its new company structure, which includes three primary segments: entertainment, sports, and experiences.
Key takeaways from Disney’s recent earnings report:
- Net income increased from $162 million to $264 million for the same period year-over-year, while overall revenue increased 5%.
- Disney+ added 7 million new subscribers, and the company teased the upcoming Disney+, Hulu bundle expected to reach consumers next month.
- The company projected ongoing cost-saving measures. Iger revealed that this number will increase by nearly $2 billion, resulting in a $7.5 billion savings plan.
- The company’s stock rose more than 7% following the report’s release.
Warner Bros. Discovery
Warner Bros. Discovery posted a challenging week in the wake of its Q3 report. The company delivered a worse-than-expected outcome, which then had rippling effects on its stock. Execs pointed to the strike and a challenging advertising landscape as the culprit for its woes. In comments following the release, CEO David Zaslav spotlighted a number of ongoing effects that will roll over into 2024, calling the historical moment a “generational disruption.”
Key takeaways from Warner Bros. Discovery recent earnings report:
- Shares dropped $0.17 as compared to the forecasted $0.06, culminating in a $417 million loss on the quarter.
- Ad revenue dropped 12% year-over-year.
- Subscribers of the company’s premium streaming product Max were also down.
- In a spot of bright news, the company saw its revenues rise 2% to nearly $10 billion.
- The company’s stock price plummeted 19% at the close of trading on Wednesday.
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