Warner Bros. Discovery shares bounce back after U.S. streaming business turns a profit
Warner Bros. Discovery reported a big quarterly loss even as its U.S. direct-to-consumer segment turned a profit for the first time ever.

The company also expects the DTC, or streaming, business to be profitable for 2023 in the U.S., a year ahead of its expectations, CEO David Zaslav said in an earnings release Friday morning.

First-quarter revenue was $10.7 billion, roughly in line with analysts' estimates. The company reported a net loss of $1.1 billion and adjusted EBITDA of $2.6 billion.

Here's what the company reported, versus analysts' estimates, according to Refinitiv:

Revenue: $10.7 billion vs. $10.78 billion expected

$10.7 billion vs. $10.78 billion expected Loss per share: 44 cents vs. earnings of 1 cent expected

Warner Bros. Discovery's stock closed 4.5% higher Friday. It's up 36% so far this year.

Like all major media companies, Warner Bros. Discovery is pivoting to streaming video as millions of Americans cancel traditional pay TV each year. The company ended the quarter with 97.6 million streaming subscribers, up 1.6 million from last quarter.

The U.S. direct-to-consumer segment turned a profit of $50 million for the quarter, a $704 million year-over-year improvement on a pro forma combined basis. Internationally, streaming still lost money, Warner Bros. Discovery's head of streaming, JB Perrette, said on an earnings conference call.

Warner Bros. Discovery is adding Discovery+ content to HBO Max and relaunching the service as Max in the U.S. later this month. Zaslav had previously promised its streaming business will be break-even by 2024 and profitable by 2025. He has aggressively cut back on content spending, including eliminating shows and movies from Max, to jump-start efforts to make the business profitable.

"We have a great product that's going to be profitable for the year now," Zaslav said on the call. He noted the company also has news and sports that it hasn't yet added to Max. Warner Bros. Discovery will be "disciplined" in its talks to renew National Basketball Association rights, Zaslav added.