Warner Bros. Discovery saw its stock rise for a second straight day Thursday, after announcing it had paid down a portion of its debt load this week.
The financial update, announced Wednesday, had been overshadowed by the turmoil at its news outlet CNN, where CEO Chris Licht was ousted. Shares rose 6% Thursday after closing more than 8% higher Wednesday. The stock is up 49% so far this year.
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The media giant has been contending with a heavy debt load stemming from the 2022 merger of Warner Bros. and Discovery. The company, which ended the first quarter with $49.5 billion in debt, has been in the midst of various cost-cutting initiatives such as and layoffs and content spending reductions.
In a public filing, Warner Bros. Discovery said it had repaid about $1.5 billion in debt on two of its loans. The company also announced it commenced a $500 million cash tender offer.
That resulted in $2.05 billion in second quarter debt reduction, about $1 billion more than Wells Fargo had forecast, according to Steven Cahall, an analyst at the bank.
The analyst noted that Warner Bros. Discovery guided that it would have roughly $930 million in second quarter free cash flow, after ending the first quarter with $2.6 billion in cash.
“We take the debt reduction to indicate management confidence in 2023 cash generation and deleveraging,” Cahall wrote.
Warner Bros. Discovery has also been working to make its streaming business profitable. CEO David Zaslav recently said on a company earnings call that the streaming business is expected to reach profitability in the U.S. in 2023, a year ahead of its expectations. The company recently relaunched and rebranded its flagship streaming service as Max, combining content from HBO and its portfolio of cable-TV networks like the Discovery Channel and TLC.
During the first quarter Warner Bros. Discovery had reported $10.7 billion in revenue, as well as a net loss of $1.1 billion.