Warner Bros. Discovery’s earnings got a boost from its film studios after a handful of box office hits during the second quarter.
The period from April though June saw the releases of “A Minecraft Movie,” “Sinners,” “Final Destination: Bloodlines,” and “F1,” which together generated $2 billion in the global box office to date, the company said Thursday.
WBD reported total revenue for the studios segment — which also includes distributing TV content — increased 55% during the quarter to $3.8 billion, with theatrical revenue up 38%, excluding the impact of foreign currency exchange, due to the higher box office revenue.
Adjusted earnings before interest, taxes, depreciation and amortization, or EBITDA, for the studios segment was $863 million during the period, up from $210 million during the same period a year prior.
In a letter to shareholders, WBD said it expects the momentum to continue, with the studios segment projected to generate at least $2.4 billion of adjusted EBITDA for the full year. The company said it was “a substantial step toward” its goal of eventually notching more than $3 billion in adjusted EBITDA for the segment.
While “Superman” was released shortly after the close of the second quarter, the film’s success is likely to help lift the third quarter for Warner Bros. Discovery. “Superman” generated $220 million globally during its opening weekend, which the company said was the “strongest ever debut for a solo Superman film.”
In late July, “Superman” and Apple’s “F1,” which Warner Bros. distributed, had more than $500 million in ticket sales, CNBC reported.
Executives have been in the process of rebuilding Warner Bros. Motion Pictures for several quarters now.
In particular, CEO David Zaslav has called out the need to revive the studios since the merger of Warner Bros. and Discovery in 2022. The segment had been plagued by the closure of theaters at the height of stay-at-home orders during the pandemic, followed by a Hollywood shutdown during the actors’ and workers’ labor strikes in 2023.
To help the unit, the company hired James Gunn and Peter Safran in 2022 as the co-heads of its DC Comics film and TV unit, in a move to steady the ship of the superhero film division. That same year, Warner Bros. appointed Michael De Luca and Pam Abdy as co-heads of Warner Bros. Motion Pictures, each of which had previously led MGM Studios.
“We’ve had an extraordinary run. You know we were in last place,” said Zaslav on Thursday, noting the studios’ hires shortly after the merger. “And together we went from last to first. You know, Disney is a little bit ahead right now … But we’re really making the turn.”
Since the merger, Zaslav has said WBD would lean on its library of franchises, including “Lord of the Rings” and “Harry Potter.” On Thursday, Zaslav said the company had the goal of two or three so-called tentpole releases a year, “which provide real stability.”
Zaslav also said the company has already “got a great script” for the upcoming “Lord of the Rings” installment from director Peter Jackson. He also noted the next iteration of the “Superman,” or the “Super family,” franchise is in the works for DC Studios.
Still, the division has been faced with staff cuts, much like the rest of WBD since the 2022 merger. Last month Warner Bros. Motion Picture Group told employees it would cut 10% of its workforce, Deadline reported.
The company is also in the midst of splitting itself apart and essentially undoing the merger of just three years ago. Next year, the present day company will be divided into two units — Warner Bros., comprised of the studios and streaming platform HBO Max; and Discovery Global, made up of the TV networks, Discovery+ and sports business.
Overall, WBD’s total revenue increased 1% during the second quarter to $9.81 billion. Adjusted EBITDA rose 9% to $1.95 billion
