Warner Bros. falls after reporting a larger-than-expected quarterly loss

Warner Bros. Discovery Inc. fell the most in more than a year after the entertainment conglomerate reported a large decrease in network advertising and warned that the market will remain challenging next year.

The company stated Wednesday that advertising income in the traditional TV business declined 12% to $1.7 billion in the third quarter. According to Bloomberg data, the hit weighed on profitability, resulting in a loss of 17 cents per share, missing Wall Street projections of an 8.6-cent loss.

Warner Bros., one of the largest film and television companies, derives about half of its revenue from traditional ad-supported TV networks like CNN and TNT, which have been losing viewers and sponsors to streaming and other web-based services.

In the three months ending September, the company’s direct-to-consumer arm, which includes the Max streaming service, recorded a surprise profit of $111 million before interest, taxes, depreciation, and amortization. Analysts had predicted a loss of $125 million.

Of course, the Barbie film was a highlight. The highest-grossing picture in the company’s history helped offset a drop in TV show sales to other sources caused by the twin strikes by Hollywood actors and writers.