Needham trims estimates on Warner Bros. Discovery into Q3 (NASDAQ:WBD)

Needham has minimize third-quarter estimates for Warner Bros. Discovery (NASDAQ:WBD), pointing to some softness within the scatter promoting market, more durable forex headwinds and ongoing subscriber losses to linear TV.

The agency is chopping again on income, working revenue and earnings per share estimates, analyst Laura Martin notes.

She’s chopping expectations for promoting income by 10% – to -9% year-over-year – after the corporate guided to a drop within the “excessive single- to low double-digits.” Advert income ought to double within the firm’s streaming area – to $108M – however in its cable networks, promoting income is seen falling 12% to $2B.

As for distribution income, she’s chopping that estimate by 2% (to -3% year-over-year) due to declining subscribers in linear TV, although she’s diminished distribution income expectations for direct-to-consumer by 5% as effectively, to $2.15B.

In the meantime, not solely are foreign-exchange headwinds larger than anticipated, however the firm is going through more durable comparisons vs. the third quarter of 2021, when the Summer season Olympics have been held.

These cuts are partly offset, although, by some larger content material income than anticipated, “as a result of WBD licensed the Lord of the Rings library motion pictures to Amazon to coincide with its streaming launch of The Rings of Energy,” in addition to larger share rely and a few “larger price synergies … than we had beforehand anticipated.”

New WBD chief David Zaslav within the spring had pledged that the mix of Discovery with WarnerMedia would lead to some $3B in merger synergies.