Warner Bros. Discovery posts surprise streaming profit

Warner Bros. Discovery Inc. reported a surprise profit in streaming TV as its legacy cable networks continued to lose advertising and viewers.

The company, which will relaunch its streaming service as Max on May 23, earned $50 million in the first quarter from its online TV business, according to a statement Friday. Analysts were forecasting a $49 million loss on average. The company’s global direct-to-consumer subscribers increased 1.6 million to 97.6 million. 

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The news will likely be viewed as a welcome sign for the company and the TV industry as a whole, which has struggled to generate profit from multibillion-dollar investments in streaming.

Elsewhere, the parent of HBO and CNN posted disappointing results. Sales, at $10.7 billion, were in line with Wall Street forecasts of $10.73 billion. The company posted a net loss of 44 cents a share, steeper than Wall Street projections for a 4-cent loss.

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Part of the shortfall was due to lower results from the Warner Bros. movie studio, which benefited a year earlier from the hit film “The Batman.” Warner Bros. Discovery was created last year with the merger of Discovery Inc. and the WarnerMedia operations of AT&T Inc. 

“WBD far exceeding its DTC subscriber growth, combined with their expectation that they can get to streaming profitability a year early, validate the idea that streaming can be sustainable,” said Insider Intelligence senior analyst Max Willens. 

On Thursday, shares of Paramount Global, parent of CBS, MTV and other networks, tumbled 28%, after the company reported steeper losses in its streaming business and slashed its dividend to conserve cash.

—Bloomberg News