Warner Bros. Discovery reported weaker-than-expected second-quarter revenue Thursday as its film studio and traditional television businesses both deteriorated, underscoring the pressure facing entertainment companies even as streaming continues to grow.
Total revenue fell to $8.72 billion, below the roughly $9.29 billion analysts expected. Studio revenue dropped 39%, while advertising revenue declined 22% as weaker box-office performance and the absence of NBA games weighed on results.
The studio decline was driven in part by a tougher comparison with last year’s slate and disappointing performances from releases including Mortal Kombat II and Supergirl. At the same time, the television business faced heavy competition from the FIFA World Cup for both viewers and advertising dollars.
The contrast inside Warner is becoming sharper: traditional media is shrinking while streaming is doing more of the work.
Streaming revenue rose 10%, helped by HBO Max’s international expansion and original programming. That growth was strong enough to show where the company’s future value increasingly sits, but not yet large enough to offset the decline in studios and legacy television.
Warner still posted a surprise adjusted profit of 6 cents a share, helped by a 23% reduction in operating expenses. That means management is cutting costs fast enough to protect earnings even while top-line pressure remains significant.
The results arrive as Warner moves deeper into a proposed $110 billion merger with Paramount Skydance. Britain cleared the transaction Thursday, leaving U.S. litigation as the major remaining obstacle. Twelve states are seeking to block the deal, with a federal trial scheduled for March 2027.
For investors, that makes Warner increasingly difficult to value as a standalone media company. The operating business is still being dragged down by declining television economics and inconsistent film performance, while the merger offers a separate path toward greater streaming scale and cost savings if regulators ultimately allow it.
JBizNews Desk | New York
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