By George Glover

Warner Bros. Discovery posted a wider first-quarter loss than Wall Street was expecting on Thursday, as revenue for the media conglomerate's studio division nosedived.

Shares initially tumbled in early trading then rebounded to trade 2.9% up for the day. The benchmark S&P 500 was up 0.5%.

The entertainment company reported an adjusted loss of 18 cents a share, as revenue tumbled 10% from a year ago to $8.98 billion. Analysts were expecting a loss of 10 cents a share on revenue of $9.49 billion, according to a FactSet poll.

Revenue for the studio segment plunged 18% from a year ago to $2.31 billion as Warner Bros. failed to produce any box-office hits that could match the success of Dune: Part Two and Godzilla x Kong: The New Empire. Analysts were expecting film and TV revenue of $2.83 billion.

The slump may not last long. Seaport Research Partners analyst David Joyce said in a note that "a strong rest of the year is underway," adding that video-game adaptation A Minecraft Movie and vampire flick Sinners, which have grossed $876 million and $245 million respectively, would both boost studios revenue for the current quarter. He rates the stock a Buy, with a $15 price target that implies shares can rally 75%.

Streaming looked like a brighter spot. Revenue for the division climbed 8% from a year ago to $2.66 billion and the Max and Discovery+ streaming services added 5.4 million subscribers over the quarter, well above what the Street had forecast.

Revenue for the networks division, which includes the likes of CNN and TNT, slipped 7% from a year ago to $4.77 billion, which Warner Bros. said was due to more subscribers leaving their contracts.

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

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May 08, 2025 10:29 ET (14:29 GMT)

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