Warner Bros. Discovery forecasts streaming profits to double, sending shares higher

Core Viewpoint - Warner Bros. Discovery (WBD) anticipates that streaming profits will double this year and forecasts at least 150 million subscribers by 2026, driven by the global rollout of Max and stringent cost controls [1][6]. Group 1: Streaming Business Performance - WBD added 6.4 million streaming subscribers in the fourth quarter, surpassing the 4.9 million estimated by analysts, attributed to the global expansion and the content slate including "Dune: Prophecy" [4][8]. - The total number of subscribers now stands at nearly 117 million, significantly lower than Netflix's 302 million and Disney+'s 124.6 million [6]. - The streaming unit is projected to report adjusted EBITDA of about $1.3 billion in 2025, a substantial increase from$677 million last year [9]. Group 2: Financial Results - In the fourth quarter, the streaming unit posted an adjusted EBITDA of $409 million, exceeding expectations of$289.1 million, with revenue rising by 5% [10]. - Overall revenue for the company was $10.03 billion, falling short of the$10.19 billion estimate, and the company reported a loss of 20 cents per share, contrary to the expected profit of 1 cent [11]. Group 3: Strategic Moves - The company has decided to separate its cable TV businesses from streaming and studio operations, which may lead to a potential sale or spinoff of its TV business [2]. - CEO David Zaslav emphasized that this separation will allow WBD to capitalize on broader market opportunities as they arise [3].