By George Glover

Warner Bros. Discovery reported a surprise profit on Thursday, as the company's studios division smashed investors' expectations after a stellar quarter at the box office. It wasn't enough to win over investors.

Shares dropped 7.1% to $11.88 in early trading. The S&P 500 was 0.5% higher.

Warner Bros. reported an adjusted profit of 63 cents a share, as revenue climbed 1% from a year ago to $9.81 billion. Analysts were expecting an adjusted loss of 12 cents a share on revenue of $9.77 billion, according to FactSet.

Studios revenue jumped 55% from a year ago to $3.80 billion, above the $3.09 billion figure analysts were forecasting. Warner Bros. said the beat was due to the success of blockbusters, including videogame adaptation A Minecraft Movie and vampire thriller Sinners. Streaming revenue was up 9% from a year ago to $2.79 billion, and the division added 3.4 million subscribers over the quarter.

The company's legacy TV networks business is still a worry, as more and more customers opt to cut the cord. Revenue for the segment fell 9% to $4.80 billion due to a drop in subscribers and a 10% slump in advertising sales.

Write to George Glover at george.glover@dowjones.com

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August 07, 2025 10:07 ET (14:07 GMT)

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