Warner Bros Discovery expects adjusted earnings to be reduced by around US$300mil to US$500mil for the full year and be in the range of US$10.5bil to US$11bil. — Reuters
LOS ANGELES: Warner Bros Discovery is bracing for a hit to its full-year profit as the ongoing strike by Hollywood actors and writers shows no signs of letting up.
Hollywood is experiencing its first dual work stoppage of writers and actors in 63 years, halting productions across the industry and costing the California economy billions of dollars.
The actors’ strike has prompted movie studios to adjust film schedules in the absence of celebrities to hit red carpets or talk shows to help build buzz.
The Warner Bros movie studio said last month it would delay the planned November release of a big-budget sequel to Dune until March.
This was because its stars would not be able to promote the movie during the strike.
Warner Bros Discovery had previously provided financial guidance for 2023, assuming the strikes would be resolved by early September.
The company now expects adjusted earnings to be reduced by around US$300mil to US$500mil for the full year and be in the range of US$10.5bil to US$11bil.
“Warner Bros Discovery’s updated guidance is likely directly attributable to its decision to push Dune 2 back to 2024,” said Insider Intelligence senior analyst Max Willens.
“It’s likely Warner Bros Discovery was expecting the sci-fi sequel to at least match the box office performance of its predecessor.”
Movie release delays are also dealing a hefty blow to cinema chains.
Among them are AMC Entertainment, Cineplex and Cinemark, which are still trying to recover from the Covid-19 pandemic.
Dune was one of the most anticipated films on the late 2023 schedule.
Warner Bros also said chief executive officer David Zaslav would be participating in an investor conference, to discuss, among other topics, the impact of the ongoing strikes.
The Warner Bros studio is now raising full-year free cash flow expectations to at least US$5bil.
In the third quarter alone Warner Bros is expected to exceed US$1.7bil due to the strong performance of the Barbie movie and strike-related factors, the company said. — Reuters
