Warner Bros. Discovery’s share price plunged more than 10 percent after-hours on Wednesday after it reported a quarterly loss of almost $10 billion.

Almost all of the loss was down to a $9.1 billion write-down in the value of the US media giant’s cable network, it announced in a statement, underscoring the challenges facing the legacy television industry.

Warner Bros. Discovery shares fell more than 10.6 percent in after-hours trading after its results were published.

The write-down “was triggered in response to the difference between market capitalization and book value,” the statement read, referring to the discrepancy between company and market valuations of the business.

It was also the result of “continued softness in the US linear advertising market, and uncertainty related to affiliate and sports rights renewals, including the NBA,” the statement added, a possible nod to the failure of its cable subsidiary TNT to guarantee it will carry National Basketball Association games after next season.

The company’s total revenues were $9.7 billion for the three months ending June 30th, down from almost $10.4 billion during the same period last year, the company said. Net losses were almost $10.0 billion—far greater than in the second quarter of 2023.

Warner Bros. Discovery’s poor second quarter came two years after it was formed by a merger between WarnerMedia and Discovery, whose chief executive David Zaslav now runs the vast media conglomerate.

“Two-plus years after launching our company, we are still in the midst of a long-term transition, marked by many notable progress points as well as some tough challenges,” Zaslav said during an earnings call on Wednesday.

“Our direct-to-consumer business is doing very, very well, and we see a tremendous amount of upside,” he added. “At the same time, there are tough conditions in the legacy business.”

© 2024 AFP

Aviation experts and analysts have been full of praise for Kelly Ortberg, who returns from early retirement Thursday to take up the challenge of turning Boeing around after a series of quality and financial issues.

The appointment of 64-year-old Ortberg to succeed outgoing Boeing chief executive Dave Calhoun was announced on July 31, the same day the US aerospace giant posted a second-quarter loss of more than $1.4 billion.

“I’m extremely honored and humbled to join this iconic company,” Ortberg said in a statement. He has not spoken publicly since his appointment.

Calhoun will meanwhile remain a special adviser to Boeing’s board of directors until March 2025.

The aircraft manufacturer’s finances are struggling to recover from the consequences of two fatal crashes of 2018 and 2019, and the COVID-19 pandemic.

But Dave Calhoun’s downfall—announced at the end of March—is the result of the accumulation of quality and compliance issues in Boeing’s commercial aviation division.

“We see Kelly Ortberg as a win for Boeing,” aviation experts at Melius Research wrote in an analyst note, adding that his experience as CEO of Rockwell Collins—now an RTX subsidiary called Collins Aerospace—”checks a lot of boxes.”

“He has an engineering background, experience running a public company, a multi-decade tenure in the aerospace industry, and is a Boeing outsider, which should allow for a fresh approach to solving Boeing’s issues,” they said.

Ortberg is “a positive hire” given his prior industry experience and his role managing a large supplier,” CFRA Research senior equity analyst Angelo Zino wrote in a note to clients.

Moving on

The most urgent issue on Ortberg’s plate is undoubtedly restoring Boeing’s production quality, which has been criticized in several audits. The firm has already drawn up a roadmap to achieve this, as it was required to do by the US Federal Aviation Administration (FAA).

To accomplish the necessary quality standards, Boeing will also be taking back control of Spirit AeroSystems, a company it spun off back in 2005.

The $4.7 billion purchase, announced in early July, is due to be completed by mid-2025.

The appointment of Ortberg, who began his career in 1983 as an engineer at Texas Instruments, comes after two long days of hearings organized by the National Transportation Safety Board (NTSB) as part of its investigation into an in-flight incident in January involving a 737 MAX 9.

The consequences of the incident was a reshuffling of executives, a freeze of 737 production by the FAA, the launch of investigations, and the reactivation of the criminal case against the company.

These are just some of the issues that Ortberg will have to tackle.

Another factor working in the new CEO’s favor is that he plans to work from Seattle, the birthplace of Boeing, where the assembly lines for the 737—its flagship aircraft—and the 777 are located.

The new generation 777X also finally seems to be within reach of certification after years of delay. On the other hand, the 737 MAX 7 and MAX 10 are still languishing.

The IAM-District 751 workers’ union, which represents more than 30,000 Boeing employees around Seattle, called Ortberg’s decision to base himself in the city “a step in the right direction.”

The union’s approval is important at a time when Boeing is negotiating its next collective agreement, which is due to come into force in September.

The union has already approved strike action if no deal is reached by this deadline.

Another major issue for Boeing is its guilty plea, announced July 24, in the criminal case relating to the crashes; the company is still waiting for the judge’s decision, and civil proceedings.

Robert Clifford, a lawyer representing the families of the victims, also reacted positively to Ortberg’s appointment, noting his “well-regarded reputation” and the fact he came from outside the company.

© 2024 AFP

The family of French deep-sea explorer Paul-Henri Nargeolet has filed a $50 million lawsuit against the operator of the submersible that imploded during a dive to the Titanic last year, killing him and four other people.

Nargeolet’s estate filed the wrongful death suit against OceanGate in the western US state of Washington, accusing the US-based company of gross negligence.

Nargeolet—known as “Mr. Titanic”—as well as OceanGate chief executive Stockton Rush, British explorer Hamish Harding, Pakistani-British tycoon Shahzada Dawood and his son Suleman died when the submersible, the Titan, failed during a June 18, 2023, expedition to the Titanic.

Tony Buzbee, one of the attorneys bringing the case, said the lawsuit, which was filed on Tuesday with a court in Seattle, “alleges serious issues with the Titan submersible.”

“We are hopeful that through this lawsuit we can get answers for the family as to exactly how this happened, who all were involved, and how those involved could allow this to happen,” Buzbee said.

Matt Shaffer, another attorney for the Nargeolet family, said Rush, the OceanGate CEO and founder, “wasn’t forthcoming with the crew and passengers about the dangers he and others knew about but the passengers and crew did not.”

OceanGate suspended operations two weeks after the tragedy.

The company charged $250,000 for a seat on its submersible, but previous concerns over its safety policies came to light after the implosion.

The victims were presumed to have died instantly when the Titan, about the size of an SUV automobile, imploded under the crushing pressure of the North Atlantic at a depth of more than two miles (nearly four kilometers).

A debris field was found 1,600 feet (500 meters) from the bow of the Titanic, which sits 400 miles off the coast of Newfoundland.

The Titanic hit an iceberg and sank in 1912 during its maiden voyage from England to New York, with 2,224 passengers and crew on board. More than 1,500 people died.

It was found in 1985 and has become a lure for nautical experts and underwater tourists.

A US Coast Guard investigation into the implosion of the submersible is ongoing.

© 2024 AFP