Warner Bros. Discovery has lowered its 2023 adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) forecast to $10.5 billion to $11.0 billion, a hit of $300 million to $500 million, “predominantly due to the impact of the strikes,” compared with the previously targeted low end of the $11.0 billion to $11.5 billion range. In a regulatory filing Tuesday, the company — led by CEO David Zaslav, who has been very engaged in negotiating with Hollywood unions to end the work stoppage — didn’t detail when it expects the strikes could end, but updated its guidance that had previously assumed they would be resolved by early September, as management had mentioned during its second-quarter earnings conference call.
Here is a detailed look at WBD’s revised full-year 2023 guidance: WBD’s filing said it was now “expecting lower adjusted EBITDA” for the full year in the range of $10.5 billion to $11 billion, “reflecting the company’s assumption that adjusted EBITDA will be negatively impacted by approximately $300 million-$500 million, predominantly due to the impact of the strikes.” The company also raised its free cash flow expectations for the full year to at least $5 billion. “Further, the company now expects to exceed $1.7 billion in free cash flow for the third quarter of 2023, in part due to the strong performance of Barbie as well as incremental impact from strike-related factors,” the filing said. The company is maintaining its expectation of achieving net leverage below 4.0x by the end of 2023, though, as well as its target gross leverage range of 2.5x-3.0x by the end of 2024.
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