Media Stocks in the Spotlight: A Deep Dive into Q4 Earnings

The fourth quarter of 2024 marked a pivotal moment for the media industry, with streaming dominance, traditional TV declines, and corporate restructuring reshaping the sector. Warner Bros. Discovery (WBD), Disney (DIS), Netflix (NFLX), and Comcast (CMCSA) all reported earnings that highlighted both opportunities and challenges. Let’s dissect their results and what they mean for investors.

Warner Bros. Discovery: Mixed Results, Streaming Gains

Warner Bros. Discovery’s Q4 revenue dipped 1% to $10 billion, weighed down by a 11% slide in advertising revenue due to declining linear TV audiences. However, its streaming service, Max, delivered strong momentum: subscribers surged by 6.4 million to 116.9 million, with revenue up 5% to $2.65 billion. Adjusted EBITDA jumped 11% to $2.7 billion, fueled by cost discipline. The company’s goal of reaching 150 million global subscribers by 2026 is ambitious but attainable if Max’s subscriber retention improves.

Despite these positives, WBD’s net loss of $0.5 billion—driven by $1.9 billion in non-cash expenses—highlights lingering structural challenges. The spin-off of linear TV assets and focus on high-margin streaming content remain critical to turning profitability.

Disney: Film Wins, Streaming Gains, but Parks Struggle

Disney’s Q4 revenue rose 6% to $22.57 billion, buoyed by blockbuster films like Deadpool & Wolverine and Inside Out 2. The entertainment segment’s operating income more than doubled to $1.07 billion, while streaming (Disney+) added 4.4 million subscribers, hitting 122.7 million core subscribers. Adjusted EPS jumped to $1.14, surpassing expectations.

However, the sports division (ESPN) faced headwinds, with operating income down 5% due to rising programming costs. International theme parks also stumbled, with a 32% drop in operating income. While Disney’s long-term guidance of double-digit EPS growth by 2026 is promising, executing on streaming cost efficiency and mitigating park slowdowns will be key.

Netflix: Profitability Achieved, but Growth Slows

Netflix solidified its streaming leadership, ending Q4 with 240 million global subscribers after adding 20 million in the quarter. Revenue growth slowed, however, as price hikes risked churn. The company turned profitable in 2024, with $6.9 billion in earnings for the first nine months. CEO Reed Hastings’ focus on localized content and password-sharing crackdowns paid off, but analysts warn of limits to further price increases and subscriber additions.

Comcast: Peacock’s Progress and Capital Discipline

Comcast reported record Q4 revenue of $31.9 billion, with Peacock’s revenue surging 28% to $1.3 billion. The streaming service’s losses narrowed significantly, while the company’s connectivity division (5G, broadband) and studios (ranked #2 globally in box office) also performed strongly. Comcast returned $13.5 billion to shareholders in 2024 via buybacks and dividends, including a 6.5% dividend hike. The planned spin-off of linear TV assets and the May 2025 opening of Epic Universe (a $1.5 billion theme park) signal strategic focus on growth areas.

Key Takeaways for Investors

1. Streaming Dominance: Netflix and Disney+ lead in profitability and scale, while WBD’s Max and Comcast’s Peacock are catching up. Adjusted EBITDA growth (e.g., WBD’s 11%, Peacock’s 175% improvement) signals operational progress.
2. Linear TV Declines: All companies are shedding underperforming traditional TV assets. WBD’s $9.1 billion goodwill impairment in its networks segment underscores the sector’s sunset.
3. Content is King: Disney’s film-driven success and Netflix’s localization strategies highlight the importance of high-quality, culturally resonant content.
4. Valuation and Risks: While WBD trades at a P/E of 18.5 (vs. Netflix’s 25.2 and Disney’s 20.1), its debt ($34.6 billion) and advertising exposure remain risks. Comcast’s robust free cash flow and dividend growth make it a defensive play.

Conclusion

The media sector’s Q4 earnings reveal a clear divide: streaming leaders (Netflix, Disney) are profitable and growing, while traditional media laggards must adapt or fade. WBD’s path to 150 million subscribers hinges on retaining its Max audience and monetizing sports content. Disney’s film-driven growth and Comcast’s capital returns offer stability, but all face content cost inflation and competition. For investors, the winners will be those balancing streaming scale with cost discipline—Netflix and Disney lead today, but WBD and Comcast’s transformations could redefine the landscape by 2026.

In a sector where content and cash flow reign supreme, these companies’ Q4 results are a snapshot of a transition—not the final act.