By Warner Bros. Discovery has forecasted a significant earnings decline for this year due to the ongoing strikes in Hollywood. Despite this, the company’s stock is showing signs of improvement.
In a recent securities filing, Warner Bros. (ticker: WBD) acknowledged that its previous full-year guidance assumed a resolution to the strikes by early September. However, since no agreement has been reached thus far, the company has revised its financial outlook to account for the strikes continuing until the end of the year.
The entertainment powerhouse now anticipates adjusted earnings before interest, tax, depreciation, and amortization to range between $10.5 billion and $11 billion for the year. This revision reflects a negative impact of approximately $300 million to $500 million primarily caused by the strikes.
Another consequence of the strike is the delayed release of three highly-anticipated films. According to The Wall Street Journal, “Dune: Part Two,” “Godzilla x Kong: The New Empire,” and “Lord of the Rings: The War of the Rohirrim” will now hit theaters throughout next year instead of their initial release dates. Notably, “Dune” was set to debut this November.
Despite these challenges, Warner Bros. stock has experienced a 1% increase in early trading, reaching $11.68.
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