Warner Bros. Discovery, Inc
The company voiced its plans to prioritize and work diligently with other industry leadership to resolve the current WGA and SAG-AFTRA strikes fairly.
The company's August 3, 2023, earnings call guidance reflected a resolution of the strikes by early September.
It noted on the earnings call that if the strikes continued through the year's end, it expected incremental upside to free cash flow and downside to adjusted EBITDA.
With both guilds still on strike today, the company expects the financial impact to WBD of these strikes will persist through the end of 2023. Therefore, it has revised its 2023 guidance.
WBD now expects FY23 adjusted EBITDA of $10.5 billion - $11 billion, implying an impact of $300 million - $500 million, predominantly due to the effects of the strikes.
It lifted its FY23 free cash flow expectations to at least $5 billion and now expects to exceed $1.7 billion in free cash flow for Q3, partly due to the strong performance of Barbie.
WBD maintained its net leverage target of below 4.0x by the end of 2023 and its target gross leverage range of 2.5x-3.0x by the end of 2024.
The strikes have already compelled the company to postpone the release of the highly anticipated "Dune: Part Two" from November to March 15, 2024.
Also, the release date for "Godzilla x Kong: The New Empire," initially scheduled for March 14, was moved to April 12, and the animated "Lord of the Rings" film, earlier slated for April, to December.
Price Action: WBD shares are down 0.52% at $11.50 premarket on the last check Tuesday.
