Warner Bros. Discovery is bracing for a hit to full-year earnings as Hollywood actors and writers strike.
For the first time in 63 years, Hollywood is experiencing a double work stoppage for writers and actors, halting production across the industry and costing the California economy billions of dollars.
Actors’ strikes have forced studios to adjust film schedules in the absence of red carpet and talk show celebrities to create buzz.
Warner Bros. Film Studios announced last month that it was delaying the release of its big-budget “Dune” sequel, which was planned for November, until March because the film could not be promoted while its stars were on strike.
Warner Bros. Discovery previously gave its 2023 financial outlook assuming the strike is resolved by early September. The company now expects adjusted earnings to fall in the $10.5 billion to $11 billion range for the full year, down about $300 million to $500 million.
“WBD’s latest guidance likely stems directly from its decision to postpone the release of ‘Dune 2’ to 2024…WBD expected the sci-fi sequel to at least match its predecessor’s box office performance. I suspect it will,” said Max, a senior analyst at Insider Intelligence. Willens.
Despite the warnings, the company’s shares rose 2%.
Movie release delays have also hit movie theater chains such as AMC Entertainment, Cineplex and Cinemark as they seek to recover from the COVID-19 pandemic.
Dune was one of the most anticipated movies on the late 2023 schedule.
Warner Bros. also said Chief Executive David Zaslav will attend an investor meeting on Wednesday to discuss the impact of the ongoing strike and other issues.
The studio has now raised its full-year free cash flow forecast to at least $5 billion, and is expected to surpass $1.7 billion in the third quarter alone due to the strong performance of the “Barbie” movies and strike-related factors.
