Warner Bros. Discovery's earnings focus on future

After a rocky week for streaming, with terrible earnings for Netflix and a dramatic end to CNN+, David Zaslav pitched WBD's strength in the company's first-quarter earnings report.

Why it matters: Because this is the company's last earnings report without WarnerMedia, the guidance is more important than the results.

What they're saying: "We are not trying to win the direct-to-consumer spending war. To begin with, we firmly believe that two content companies coming together have unique advantages, including the largest film and television library from Warner, the largest domestic and international lifestyle library from Discovery and significant global live sports and news," said Zaslav, WBD's CEO and president.

Zaslav's opening remarks seemed to throw shade at both Netflix and CNN+ with critiques on spending. He shared a four-part "recipe for long-term success":

1. "World-class IP content that is loved all over the globe"
2. "Distribution of that content on every platform and device where consumers want to engage, whether it's theatrical or linear or streaming"
3. "Balanced monetization model that optimizes the value of what we create and drives diversified revenue streams"
4. "Durable and sustainable free cash flow generation"

By the numbers: WBD CFO Gunnar Wiedenfels' opening remarks focused on cost synergies, sharing the "good news" and the "bad news" for reaching the $3 billion target.

• WarnerMedia's operating profit and cash flow were below his expectations. Wiedenfels estimated WBD's profit baseline will be $500 million lower than what he anticipated.
• But Wiedenfels said there are cost-cutting opportunities. "I feel very confident in our ability to rectify some of the drivers behind the business case deviations, and some very quickly, with the CNN+ decision last week being Exhibit A," he said.

• Wiedenfels noted potential cutting on the $5 billion marketing spend. "We intend to drive for the highest level of financial discipline here to make sure that every dollar spent is purposeful and measured," he said.
• Discovery reported 24 million streaming subscribers, up from 22 million last quarter. (WarnerMedia's HBO and HBO Max ended the quarter with 76.8 million subscribers, up from 73.8 million subscribers last quarter, as AT&T reported last week.)

What's next: WBD's Upfront is May 18, when the company will share "the full suite of our combined network portfolio," Zaslav said.

The bottom line: "Warner Bros Discovery is playing to win," LightShed Partners analyst Rich Greenfield tweeted.