From Business Insider · James Faris · · 2m
Skydance beats Q3 targets in first earnings after mega-merger
David Ellison and Ynon Kreiz told staff the combined company hit revenue and profit goals, but investors remain wary of the $79 billion debt load.
In brief
David Ellison and Ynon Kreiz told staff the combined company hit revenue and profit goals, but investors remain wary of the $79 billion debt load. Skydance exceeded third quarter earnings estimates in its first report after merging Paramount and Warner Bros. Discovery, but shares fell as investors worry about debt…
Skydance beats earnings in first report
CEO David Ellison and co-CEO Ynon Kreiz announced that Paramount reached its revenue goal and topped profit projections in the third quarter, the first since the Paramount-Warner Bros. Discovery merger last month.
Executives credit employees for progress
In a memo to staff, Ellison and Kreiz said the company's progress was a direct result of employee contributions during the five weeks since closing the transaction.
“The progress we've made is a direct result of your contributions.”
Three strategic goals outlined
Skydance aims to establish itself as a premier global content engine, accelerate its integrated direct-to-consumer platform, and optimize its profitable linear TV portfolio anchored by CBS.
Massive asset portfolio assembled
The merged company controls Warner Bros. studio, Paramount Pictures, HBO, CBS, CNN, Paramount+, HBO Max, Pluto TV, TNT, HGTV, and Comedy Central, giving it scale to compete with Netflix and YouTube.
Executives promise market leadership
Ellison and Kreiz wrote that Skydance will lead in a crowded market by using its scale, assets and global reach to drive transformation and growth.
“We will lead in a crowded market by using our scale, assets and global reach to drive transformation and growth.”
Stock falls despite solid results
Shares slid two percent in after-hours trading after initially jumping over four percent, as investors remain concerned about the company's ability to manage its debt and grow profitably.
Debt load remains central concern
Skydance carries roughly seventy nine billion dollars in debt. Forrester analyst Mike Proulx said the massive debt remains at the center of concern over the company's ability to profitably grow.
“The newly merged Skydance comes with massive debt that remains at the center of concern over the company's ability to profitably grow.”
Cost savings plan underway
Ellison's company has said it plans to save six billion dollars by buying WBD, with the majority of those cost savings not coming from layoffs, though employees worry about cuts and internal competition.
Return-to-office mandate issued
In late October, Skydance told employees to return to the office five days a week or take a buyout offer, signalling the integration challenges ahead as Paramount and WBD teams combine.
At a glance
Skydance exceeded third quarter earnings estimates in its first report after merging Paramount and Warner Bros. Discovery, but shares fell as investors worry about debt repayment.
