We Think You Should Be Aware Of Some Concerning Factors In Warner Bros. Discovery's (NASDAQ:WBD) Earnings

Explore Warner Bros. Discovery's Fair Values from the Community and select yours

The market shrugged off Warner Bros. Discovery, Inc.'s (NASDAQ:WBD) solid earnings report. We think that investors might be worried about some concerning underlying factors.

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The Impact Of Unusual Items On Profit

For anyone who wants to understand Warner Bros. Discovery's profit beyond the statutory numbers, it's important to note that during the last twelve months statutory profit gained from US$1.7b worth of unusual items. While we like to see profit increases, we tend to be a little more cautious when unusual items have made a big contribution. When we analysed the vast majority of listed companies worldwide, we found that significant unusual items are often not repeated. And that's as you'd expect, given these boosts are described as 'unusual'. We can see that Warner Bros. Discovery's positive unusual items were quite significant relative to its profit in the year to June 2025. As a result, we can surmise that the unusual items are making its statutory profit significantly stronger than it would otherwise be.

That might leave you wondering what analysts are forecasting in terms of future profitability. Luckily, you can click here to see an interactive graph depicting future profitability, based on their estimates.

Our Take On Warner Bros. Discovery's Profit Performance

As we discussed above, we think the significant positive unusual item makes Warner Bros. Discovery's earnings a poor guide to its underlying profitability. As a result, we think it may well be the case that Warner Bros. Discovery's underlying earnings power is lower than its statutory profit. On the bright side, the company showed enough improvement to book a profit this year, after losing money last year. At the end of the day, it's essential to consider more than just the factors above, if you want to understand the company properly. In light of this, if you'd like to do more analysis on the company, it's vital to be informed of the risks involved. For instance, we've identified 3 warning signs for Warner Bros. Discovery (2 are potentially serious) you should be familiar with.

Today we've zoomed in on a single data point to better understand the nature of Warner Bros. Discovery's profit. But there are plenty of other ways to inform your opinion of a company. Some people consider a high return on equity to be a good sign of a quality business. While it might take a little research on your behalf, you may find this free collection of companies boasting high return on equity, or this list of stocks with significant insider holdings to be useful.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.