Wrapping up Q1 earnings, we look at the numbers and key takeaways for the media stocks, including Warner Bros. Discovery (NASDAQ:WBD) and its peers.
The advent of the internet changed how shows, films, music, and overall information flow. As a result, many media companies now face secular headwinds as attention shifts online. Some have made concerted efforts to adapt by introducing digital subscriptions, podcasts, and streaming platforms. Time will tell if their strategies succeed and which companies will emerge as the long-term winners.
The 7 media stocks we track reported a satisfactory Q1. As a group, revenues missed analysts’ consensus estimates by 5.3%.
In light of this news, share prices of the companies have held steady as they are up 2.6% on average since the latest earnings results.
Warner Bros. Discovery (NASDAQ:WBD)
Formed from the merger of WarnerMedia and Discovery, Warner Bros. Discovery (NASDAQ:WBD) is a multinational media and entertainment company, offering television networks, streaming services, and film and television production.
Warner Bros. Discovery reported revenues of $8.98 billion, down 9.8% year on year. This print fell short of analysts’ expectations by 6%. Overall, it was a slower quarter for the company with a significant miss of analysts’ adjusted operating income estimates and a miss of analysts’ Advertising revenue estimates.
Warner Bros. Discovery delivered the slowest revenue growth of the whole group. Interestingly, the stock is up 4.8% since reporting and currently trades at $9.
Read our full report on Warner Bros. Discovery here, it’s free.
Best Q1: Disney (NYSE:DIS)
Founded by brothers Walt and Roy, Disney (NYSE:DIS) is a multinational entertainment conglomerate, renowned for its theme parks, movies, television networks, and merchandise.
Disney reported revenues of $23.62 billion, up 7% year on year, outperforming analysts’ expectations by 2%. The business had a very strong quarter with a solid beat of analysts’ adjusted operating income estimates and an impressive beat of analysts’ EPS estimates.
Disney delivered the biggest analyst estimates beat among its peers. The market seems happy with the results as the stock is up 19% since reporting. It currently trades at $109.52.
Is now the time to buy Disney? Access our full analysis of the earnings results here, it’s free.
Weakest Q1: Warner Music Group (NASDAQ:WMG)
Launching the careers of legendary artists like Frank Sinatra, Warner Music Group (NASDAQ:WMG) is a music company managing a diverse portfolio of artists, recordings, and music publishing services worldwide.
Warner Music Group reported revenues of $1.48 billion, flat year on year, falling short of analysts’ expectations by 2.2%. It was a softer quarter as it posted a significant miss of analysts’ EPS estimates.
As expected, the stock is down 12.1% since the results and currently trades at $26.45.
Read our full analysis of Warner Music Group’s results here.
The New York Times (NYSE:NYT)
Founded in 1851, The New York Times (NYSE:NYT) is an American media organization known for its influential newspaper and expansive digital journalism platforms.
The New York Times reported revenues of $635.9 million, up 7.1% year on year. This print was in line with analysts’ expectations. Overall, it was a strong quarter as it also recorded a solid beat of analysts’ EPS estimates and a decent beat of analysts’ adjusted operating income estimates.
The New York Times scored the fastest revenue growth among its peers. The stock is up 5.2% since reporting and currently trades at $55.41.
Read our full, actionable report on The New York Times here, it’s free.
Scholastic (NASDAQ:SCHL)
Creator of the legendary Scholastic Book Fair, Scholastic (NASDAQ:SCHL) is an international company specializing in children's publishing, education, and media services.
Scholastic reported revenues of $335.4 million, up 3.6% year on year. This number lagged analysts' expectations by 3.5%. Taking a step back, it was a mixed quarter as it also recorded a solid beat of analysts’ EPS estimates but full-year EBITDA guidance missing analysts’ expectations.
The stock is down 8.9% since reporting and currently trades at $17.10.
Read our full, actionable report on Scholastic here, it’s free.
Market Update
The Fed’s interest rate hikes throughout 2022 and 2023 have successfully cooled post-pandemic inflation, bringing it closer to the 2% target. Inflationary pressures have eased without tipping the economy into a recession, suggesting a soft landing. This stability, paired with recent rate cuts (0.5% in September 2024 and 0.25% in November 2024), fueled a strong year for the stock market in 2024. The markets surged further after Donald Trump’s presidential victory in November, with major indices reaching record highs in the days following the election. Still, questions remain about the direction of economic policy, as potential tariffs and corporate tax changes add uncertainty for 2025.
Want to invest in winners with rock-solid fundamentals? Check out our Hidden Gem Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.
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