10:01 AM EST, 11/07/2024 (MT Newswires) -- Warner Bros. Discovery ( WBD ) reported the strongest quarterly gain in subscribers for its Max streaming platform in the September period alongside surprise net income, even as revenue in the three months declined from a year earlier, dented by a weaker box office.

Total revenue fell 4% year-on-year in the three months through Sept. 30 to $9.62 billion, the media and entertainment giant said Thursday. That missed the consensus on Capital IQ for $9.79 billion. Net income was $0.05 a share, up from the year-earlier loss of $0.17 a share. The Street was expecting a GAAP loss of $0.07. The stock jumped 14% in Thursday trading.

"While we continue to confront extraordinary disruption in our environment, the strategy we have undertaken to ready Warner Bros. Discovery ( WBD ) for future success is showing important results," Chief Executive David Zaslav said in a statement.

Net subscriber additions in Max were 7.2 million, "the strongest quarterly gain since the platform's launch, resulting in healthy subscriber-related revenue growth and meaningful progress toward achieving our 2025 direct-to-consumer segment financial objectives," Zaslav said.

In the third quarter, direct-to-consumer revenue was up 8% to $2.63 billion as total subscribers reached 110.5 million. Networks revenue increased 3% to $5.01 billion, with content benefitting from Olympic broadcast rights, the company said.

A weaker box office, though, weighed on the studios segment, sending revenue down 17% to $2.68 billion, Warner Bros. Discovery ( WBD ) said. Theatrical revenue sank 40%, "primarily driven by lower box office revenue as the performance of 'Beetlejuice Beetlejuice' and 'Twisters' in the current year was more than offset by the stronger performance of 'Barbie' in the prior year," the company said.

"Even in an industry of hits and misses, we must acknowledge that our studios business must deliver more consistency," Zaslav said on a conference call with analysts, according to a Capital IQ transcript. "For the past two years, we've been driving changes within our motion picture studio to improve greenlight governance and franchise management, which remain focal points going forward."

The film business in the fourth quarter is expected to "perform more or less in line" with the same period last year, even as 'Joker: Folie a Deux' underperformed, Chief Financial Officer Gunnar Wiedenfels told analysts. The Lady Gaga and Joaquin Phoenix musical has been panned by critics, earning a 32% rating on opinion aggregator site Rotten Tomatoes.

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