Warner Bros. Discovery Q4 Preview: Do Results Matter As Netflix, Paramount Fight For The Future of Hollywood?

Media giant Warner Bros. Discovery (NASDAQ:WBD) reports fourth-quarter financial results Thursday before market open. With a bidding war brewing for the company, the question is whether financial results matter more or less than normal.

Here are the earnings estimates and key items to watch in the company's financial results.

Warner Bros. Discovery Q4 Earnings Estimates

Analysts expect Warner Bros. Discovery to report fourth-quarter revenue of $9.38 billion, down from $10.03 billion in last year's fourth quarter, according to data from Benzinga Pro.

The company has missed analyst revenue estimates for 15 straight quarters.

Analysts expect the company to report earnings per share of 3 cents, up from a loss of 20 cents per share in last year's fourth quarter.

The company has missed analyst estimates for earnings per share in eight of the last 10 quarters.

Merger Deals in Place

Warner Bros. Discovery currently has two competing bids for the company and could continue to see offers revised.

Netflix Inc (NASDAQ:NFLX) has offered $27.75 per share for the company's film and television studios and its HBO streaming segment.

Paramount Skydance (NASDAQ:PSKY) has revised its bid to $31 per share in cash for the entire Warner Bros. Discovery company, up from a previous bid of $30 per share. Paramount's newest bid includes a $7 billion regulatory termination fee and covers a $2.8 billion termination fee Warner Bros. would owe Netflix if it walks away from the existing deal between the two companies.

The Board of Directors of Warner Bros. Discovery said that the revised bid from Paramount could be a "superior proposal" to the Netflix offer.

If the bid is deemed to be superior, Warner Bros. would give Netflix four business days to revise its offer.

Key items to Watch in Q4 Results

With the bidding war in the backdrop, attention on Warner Bros. Discovery's financials could be minimal as shares can only move so much lower or higher, given the current offers.

The company has struggled to beat analyst estimates in recent quarters, as viewed by the data above.

The company saw revenue down 6% year-over-year in the third quarter and the fourth quarter is expected to see another year-over-year decline.

Given Netflix is only bidding on the company's film, TV and streaming assets, those could be the key areas to watch.

Warner Bros. reported 128 million streaming subscribers at the end of the third quarter, up from 110.5 million in the previous year's third quarter and up from the 125.7 million reported in the second quarter.

Revenue for the streaming segment was flat in the third quarter, with advertising revenue up but lower revenue per user reported.

Investors and analysts will likely be watching to see how many subscribers the company has and its streaming revenue, as that could factor into the merger with Netflix, with potential regulatory struggles to combine two of the largest streaming platforms in the United States.

The film studios segment could also be monitored to see how the upcoming film lineup is progressing, with concerns that either merger could result in job losses and fewer movies playing in theaters if Netflix acquires the company.

Warner Bros. Discovery Stock Price Action

Warner Bros. Discovery stock is down 0.4% to $29.02 on Wednesday versus a 52-week trading range of $7.52 to $30.00. Waner Bros. Discovery shares are up 171.5% over the last 52 weeks.

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