Investing.com -- Warner Bros. Discovery, Inc. (NASDAQ:WBD) posted higher than expected core profit in the second quarter, as retail subscriber growth boosted distribution revenue at the entertainment group's key streaming business.
Adjusted earnings before interest, taxes, depreciation and amortization rose by 22% on a combined pro forma basis to $2.15 billion in the three months ended June 30, topping Bloomberg consensus forecasts of $1.98B. On a net basis, the loss available to Warner Bros. Discovery was $1.24B, down from $3.42B in the corresponding period last year.
Meanwhile, free cash flow of $1.72B was also above projections, although revenue of $10.36B missed estimates.
Shares in the company jumped in premarket trading on Thursday.
The results come after the New York-based firm launched its "Max" service in the United States during the quarter, which chief executive David Zaslav credited for helping its key direct-to-consumer business track "well ahead of our financial projections."
"Max" brings together HBO Max's scripted content with Discovery's reality offerings.
In the wake of the release, distribution revenue at Warner Bros. Discovery's increased by 1% to $2.19B, which the group said was due to an uptick in "retail" subscribers, or customers that come to either Max in the U.S. and HBO Max globally directly through the service. This was partially offset by a drop in subscribers who have access through their Pay TV provider, the company noted.
Meanwhile, operating expenses at the streaming unit decreased by 8% excluding foreign exchange effects on a pro forma combined basis to $2.74B. Media groups like Warner Bros. Discovery have been attempting to balance spending on content with controlling costs.