Skydance Stock Sinks Over 8% After First Post-Merger Earnings Report
Wall Street is taking a wait and see approach as they await a full financial picture for the combined company The post Skydance Stock Sinks Over 8% After First Post-Merger Earnings Report appeared first on TheWrap .
Skydance's stock plummeted more than 8% on Tuesday as Wall Street analyzed the company's post-merger earnings report. The report showed lower-than-expected third-quarter earnings and future guidance for the merged company, which has yet to finalize the merger with Warner Bros. Discovery. Analysts expressed cautious optimism, noting that Skydance's growth in streaming and studios on the Paramount side is promising, but the company is in the early stages of a multi-year transformation.
They highlighted the challenges of integrating two studios, merging streaming businesses, and rationalizing costs and technology. Despite the optimism, some analysts, such as TD Cowen's Doug Creutz, remain skeptical about the management's ability to create value from the merger, citing high integration and leverage risks. Skydance has outlined plans to cut costs across various areas, aiming to generate $6 billion in savings.
The company also announced a Paramount+-HBO Max bundle and a merger of the two services onto the same backend within the first year of closing. However, analysts expressed caution about the revenue trajectory and potential cannibalization from subscriber overlap. Skydance anticipates incurring $1.5 billion to $2 billion in costs in 2027 and $4 billion over the course of its transformation, with a goal of achieving $10 billion in annual free cash flow by 2030.
Written by urgent.news from TheWrap's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
