Warner Bros. Discovery shares fall as company warns on 2022 profit, messy combination of assets

Warner Bros. Discovery reported a 13% revenue jump and consistent streaming subscriber growth for its fiscal first quarter Tuesday. The results don’t include first-quarter performance from WarnerMedia, which Discovery bought this month.

The company reported revenue of $3.16 billion and net income of $456 million. Shares rose as much as 2% in premarket trading.

Here are the key numbers:

• Earnings per share: 69 cents, compared with 21 cents in last year’s first quarter
• Revenue: $3.16 billion, compared with $2.79 billion in last year’s first quarter
• Discovery streaming customers: 24 million, up 2 million from the prior quarter

The newly combined Warner Bros. Discovery, a result of the WarnerMedia-Discovery merger that closed April 8, debuts as a pure-play media company that investors can compare to Disney, Netflix and Paramount Global. Chief Executive Officer David Zaslav hopes to show Wall Street the new entity’s assets, including streaming services HBO Max and Discovery+, can compete globally for market share against the biggest entertainment companies in the world.

“We are putting together the strategic framework and organization to drive our balanced approach to growing our businesses and maximizing the value of our storytelling, news and sports,” Zaslav said in a statement. “I could not be more excited about the massive opportunity ahead.”

The combined WarnerMedia-Discovery company has a market valuation of more than $50 billion.

Zaslav took his first steps toward streamlining the company’s operations last week when he shut down CNN+ just weeks after its launch.

Zaslav plans to combine HBO Max and Discovery+ into a bundled streaming service. The company hasn’t announced if the new combined product will be renamed or when that change will take place.

“We will clearly take swift and decisive action as you saw last week with CNN+,” Zaslav said on the company’s earnings call.

Ahead of that effort, Discovery began winding down promotion around Discovery+ during the first quarter. The company said selling, general and administrative expenses in the period dropped 25%, primarily due to lower marketing-related expenses for Discovery+ compared with last year’s launch period.

Warner Bros. Discovery said it added 2 million Discovery-related streaming subscribers in the quarter for a total of 24 million. That’s consistent with the 2 million added in the fourth quarter.

Last week, AT&T said HBO and HBO Max had 76.8 million subscribers at the end of the first quarter of 2022. The announcement marked the final time WarnerMedia would be part of AT&T’s earnings report.

WATCH: Why CNN+ is shutting down