news/GOOGL/2023.02.24/Warner Bros Discovery shares fall as ad woes weigh.txt

Executives at the company echoed the tensions shared by other large media and tech firms such as Paramount Global and Google-parent Alphabet Inc about the uncertainty of ad market recovery."The biggest unknown continues to be in the ad sales environment," Gunnar Wiedenfels, chief financial officer of Warner Bros Discovery, told analysts on an earnings call.The company cut its forecast for 2023 adjusted core earnings, or EBITDA, and now expects it to grow in low- to mid-twenties percentage. This implies a range of $11 billion to $11.5 billion, below its prior target of $12 billion."Given secular and cyclical pressures on advertising and distribution revenues, it isn't clear to us that the company is clearly out of the woods yet," analysts at MoffettNathanson wrote in a note.The company's networks business, which includes channels like HGTV, Discovery Channel and TLC, took a hit as brands cut their advertising budgets, leading to a 14% decline in fourth-quarter segment revenue from ads. The division's advertising revenue wasn't "looking much better in Q1 2023", it said.The media giant, formed through the merger of Discovery Inc and AT&T spin-off Warner Media, said it had completed all restructuring related to the merger, with restructuring charges resulting in a wider-than-expected loss in the quarter.Wolfe Research analyst Peter Supino noted net debt was still very high and raised concerns about the stock's roughly 66% gains so far this year and the company's high pay TV exposure. The company had less U.S. pay TV subscribers in the fourth quarter as more people transitioned to streaming."WBD might be set up to take a breather," Supino said. (Reporting by Samrhitha Arunasalam and Chavi Mehta in Bengaluru; Editing by Milla Nissi)