Warner Bros. Discovery Swings to Q3 Loss, With ‘Superman’ Box Office Offset by Ad Declines

Warner Bros. Discovery has been telling investors it wants to split the company in two — and just produced some evidence that such a deal is necessary.

The owner of CNN, HBO and the Warner Bros. studio said it swung to a loss of $148 million in the third quarter, as a box-office boost spurred by films like the latest “Superman” were offset by declines in its traditional TV business, which suffered from comparisons to the year-earlier quarter when the company enjoyed rights to broadcast the 2024 Paris Olympics in Europe. The company has been pushing to separate its studios and streaming operations from its TV networks, and has said it will consider a sale or other transaction.

Warner’s planned divide “remains on track to be completed by mid-2026,” The company said in a letter to shareholders. Even so, Warner “is evaluating a broad range of strategic options, including proceeding with the planned separation, a potential transaction for the entire company, or separate transactions for the Warner Bros. and/or Discovery Global businesses,” and will consider an ” alternative separation structure that would enable a merger transaction involving Warner Bros., while Discovery Global would be spun off to our shareholders.”

Revenue during the period came to $9.0 billion, a 6% decrease from the year-earlier quarter. Without including the performance of the Europe Olympics, revenue would have been flat, the company said.

The company said it added 2.3 million streaming subscribers around the world, but revenue was from such activity was flat with the year-earlier period. Revenue from movies rose 74%, largely due to the performance of films like “Superman” and “The Conjuring: Last Rites and Weapons,” as well as some carry over from “F1,” released in the second quarter.

Revenue from traditional TV operations fell 23%, to $3.88 billion, owing to the loss of an event on par with the Paris Olympics playing during the period as well as the strong news cycle tied to the 2024 election. Distribution revenue fell 8% and advertising revenue fell 21%. million compared to the prior year quarter.