Warner Bros. warns of up to $500 million in lost profits due to strikes
Warner Bros. Discovery expects its full-year profit to fall as the ongoing Hollywood actors and writers strike shows no sign of easing.
Hollywood is experiencing a double walkout by writers and actors for the first time in 63 years, halting production across the industry and costing the California economy billions of dollars.
The actors’ strike has prompted film studios to adjust movie schedules when celebrities aren’t on the red carpet or talk shows to create a stir.
Film studio Warner Bros. announced last month that it was delaying a November release of a big-budget sequel to Dune until March because its stars were unable to promote the film during the strike.
Warner Bros. Discovery previously provided financial guidance for 2023, assuming the strikes would be resolved by early September. The company now expects full-year adjusted earnings to decrease by about $300 million to $500 million and be in the range of $10.5 billion to $11 billion.
“WBD’s updated projections are likely a direct result of the decision to delay ‘Dune 2’ to 2024… It’s likely that WBD expected the sci-fi sequel to at least match the grossing of its predecessor,” he said Max, a senior analyst at Insider Intelligence, will.
Despite the warning, the company’s shares rose 2%.
Delays in movie releases also deal a blow to cinema chains like AMC Entertainment, Cineplex and Cinemark, which are still trying to recover from the COVID-19 pandemic.
Dune was one of the most anticipated movies of late 2023.
Warner Bros. also said CEO David Zaslav will attend an investor conference on Wednesday and is expected to discuss, among other things, the impact of the ongoing strikes.
The studio is now raising full-year free cash flow expectations to at least $5 billion, rising to over $1.7 billion in the third quarter alone due to the strong performance of the Barbie movie and strike-related factors is expected.
