Warner Bros. Discovery said on Tuesday it added about 2 million paid streaming subscribers in the first quarter, at a time when industry pioneer Netflix lost subscribers for the first time in more than a decade.
In the first set of results from the media giant forged by a $43 billion merger between Discovery Inc and AT&T Inc's WarnerMedia assets, the TLC and Eurosport channel owner said quarterly revenue rose 13% to $3.16 billion, helped by a rebound in ad spending and the Beijing Winter Olympics.
The results did not include figures for WarnerMedia, home to the Harry Potter and Batman franchises, pay TV channels such as CNN and streaming service HBO Max.
In a call with investors, Chief Financial Officer Gunnar Wiedenfels said 2022 will "undoubtedly be a messy year." He estimated that the WarnerMedia part of the company's profit baseline for 2022 will be around $500 million lower than what he had anticipated, offset by a "couple of hundred million dollars" on the Discovery side of the company.
Wiedenfels reaffirmed the company’s goal of achieving $3 billion in cost savings, citing the recent decision to cancel CNN+ as an example. “A lot of synergy potential is really going to come from cost avoidance and elimination of planned expenses for the streaming business," he said.
In the three months before the merger's close, the number of total paid streaming subscribers - including those from Discovery+ - rose to a total of 24 million.
Across the sector, Wall Street is starting to question streaming's long-term prospects following a lightning surge during the pandemic. Those concerns were compounded after Netflix Inc's disappointing results and outlook.
Last week, Warner Bros Discovery said it would shut down its CNN+ streaming service less than a month after it got off to a slow start, reportedly attracting just 10,000 viewers a day.
Net income available to the company rose to $456 million, or 69 cents per share, from $140 million, or 21 cents per share, a year earlier.
Shares of the company were trading 4.2% lower before the bell on Tuesday.
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