Earnings: Warner Bros Discovery and Lyft Inc

Warner Bros. Discovery reports big overall loss even as U.S. streaming shows profit

Warner Bros Discovery (WBD) has reported a large quarterly loss even as its US direct streaming segment turned a profit for the first time in its history.

The company also expects DTC, or streaming, to be profitable in the U.S. in 2023, a year ahead of its expectations, CEO David Zaslav said in an earnings report Friday morning.

Revenue for the first quarter was $10.7 billion, roughly in line with analysts' estimates. The company reported a net loss of $1.1 billion and adjusted EBITDA of $2.6 billion.

Here are the figures the company reported compared to analysts' estimates, according to Refinitiv:

Revenue: $10.7 billion versus expectations of $10.78 billion.
Lossper share: Earnings: 44 cents versus the expected 1 cent

Like all big media companies, Warner Bros. Discovery focuses on streaming video as millions of Americans cancel traditional pay TV each year. The company ended the quarter with 97.6 million streaming subscribers, up 1.6 million from the previous quarter.

The U.S. direct-to-consumer segment made a profit of $50 million for the quarter, a year-over-year improvement of $704 million on a pro forma combined basis. Internationally, streaming was still losing ground, the head of streaming at Warner Bros. said during the conference call. Discovery's JB Perrette.

Warner Bros. Discovery is adding Discovery+ content to its HBO Max service and will relaunch it in the U.S. later this month as Max. Zaslav has previously promised that his streaming business will be profitable by 2024 and profitable by 2025. Zaslav has aggressively cut back on content spending, including phasing out shows and movies from Max, to jumpstart efforts to make the business profitable.

"We have a great product that will be profitable this year," Zaslav said on the earnings conference call. Zaslav noted that the company also has news and sports coverage, which it has not yet added to Max. Warner Bros. Discovery will be in "disciplined" negotiations to renew the rights to the National Basketball Association, Zaslav added.

"We have a great diversity of assets," Zaslav said. "We've now restructured that company and we're really solid in the cramps. The environment is challenging, challenging, challenging, but once things start to pick up, you'll see a very quick turnaround in this company." Warner Bros. Discovery lost $930 million in free cash flow in the quarter, primarily due to interest and payments for sports media rights.

The company ended the fourth quarter with $49.5 billion in debt on its balance sheet and $2.6 billion in cash on hand. Warner Bros. Discovery has been trying to increase free cash flow by cutting spending, including laying off thousands of employees last year to reduce its high debt load.

The company's cable networks segment brought in $5.6 billion in the quarter, down 10% year over year. Distribution revenue fell 3% excluding foreign currencies as more customers canceled cable TV. Advertising revenue declined 14% in the quarter.

Warner Bros. studio revenues were $3.2 billion, a 7% decline excluding foreign exchange.

Lyft shares fell 15% on a weak second-quarter outlook

Shares of Lyft Inc (LYFT) plunged nearly 15% in extended trading Thursday after the ride-hailing company issued a weaker-than-expected forecast for the second quarter.

Here's a look at how the company fared in the first quarter, according to analysts polled by Refinitiv:

Loss per share: 7 cents as adjusted versus an expected loss of 6 cents.
Revenue: $1 billion versus an expected $981 million

$LYFT reported a net loss of $187.6 million, including stock-based compensation expense and related payroll costs of $186.6 million. In the prior year, the company earned $196.9 million.

Lyft said it expects second-quarter sales of approximately $1.0 billion to $1.02 billion, while analysts had forecast sales of $1.08 billion, according to Refinitiv.

Adjusted earnings before interest, taxes, depreciation and amortization will be $20 million to $30 million, the company said. Analysts in Refinitiv's survey on average expected EBIDTA of $49.3 million.

Revenue in the first quarter rose 14% from $875.6 million a year earlier.

"We are improving our ridesharing service and are excited about the early results," Lyft CEO David Risher said in a statement. "Riders are riding more and drivers have the opportunity to earn more."

Risher, a former retail executive at Amazon, took over as CEO last month after co-founders Logan Green, who was CEO, and John Zimmer announced they would step down from day-to-day roles at the company.

Before the post-Christmas plunge, Lyft's stock had lost half its value over the past year.