Warner Bros Discovery (WBD, Financials) is reportedly weighing a breakup of its business, separating cable from streaming and studios, according to CNBC. The stock rebounded Thursday despite a weak first-quarter report.
The company added 5.3 million streaming subscribers during the quarter, beating the 3.1 million expected and bringing its total to 122.3 million. Titles such as HBO’s The White Lotus and The Pitt helped boost growth in its Max platform.
Studio revenue dropped 18% to $2.31 billion, below the $2.73 billion estimate, as Mickey 17 underperformed at the box office. In contrast, Q2 has started strong with A Minecraft Movie earning $900 million globally.
Revenue from the cable networks division, including CNN and Discovery Channel, declined 7% as cord-cutting continued. The company began reporting under a new structure in December, separating its declining cable business from higher-growth units.
WBD holds $38 billion in gross debt, which may limit options for selling the linear TV business. eMarketer’s Ross Benes said a leaner WBD without cable could boost growth but added that finding a buyer for declining TV assets will be difficult.
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