Skydance Shares Fall 8.7% as $87 Billion Debt Burden Overshadows Earnings Beat
Key Takeaways
- •Skydance shares fell 8.7% to $7.94 on Tuesday, erasing the prior day's gain, leaving the stock down 35% in 2026.
- •Third-quarter adjusted earnings of 45 cents per share beat estimates, but revenue of $7.03 billion narrowly missed the $7.04 billion forecast, and results excluded Warner Bros. because the merger closed after the quarter ended.
- •Skydance holds $87 billion in gross debt against $10 billion in cash, and is targeting more than $6 billion in annual savings within three years plus $10 billion in positive cash flow by 2030.
- •Paramount+ subscribers rose 6% year over year to 82.2 million with revenue up 21% to $2.13 billion, and the service is planned to be bundled with HBO Max in early 2027.
- •Analyst views remain divided, with BofA keeping an Underperform rating and a $9 target while Citizens JMP maintained Outperform at $13, and Skydance warned a weak Warner film slate could reduce fourth-quarter profit by up to $200 million.
Skydance Corp. (NASDAQ: SKYD) (NYSE: SKYD) shares fell 8.7% to $7.94 on Tuesday, erasing the 8.6% gain recorded Monday after the company reported earnings. The stock is down 35% in 2026. Trading volume was about 5.8 million shares, well below the daily average of roughly 14.6 million.
The company’s third-quarter report covered the period ended Sept. 30, before its merger with Warner Bros. closed on Oct. 6. As a result, none of Warner Bros.’ financial results were included in the quarter.
Skydance reported adjusted earnings of 45 cents per share, compared with the 13-cent estimate tracked by FactSet. Revenue rose 5% year over year to $7.03 billion, narrowly missing analysts’ $7.04 billion estimate. GAAP earnings were 6 cents per share, while adjusted EBITDA was $1.0 billion, representing a 14% margin.
Paramount+ subscribers reached 82.2 million, up 6% year over year, and revenue from the service rose 21% to $2.13 billion. The company plans to bundle Paramount+ with HBO Max in early 2027.
The earnings figures were also posted by Wall St Engine on X:
SKYDANCE $SKYD Q3’26 EARNINGS HIGHLIGHTS Revenue: $7.03B (Est. $7.04B) ; +5% YoY Adj. EPS: $0.45 (Est. $0.11) GAAP EPS: $0.06 Adj. EBITDA: $1.0B; 14% margin Paramount+: Subscribers: 82.2M; +6% YoY Revenue: $2.13B; +21% YoY Segment Revenue: Studios:… pic.twitter.com/dD0PQr0NIO — Wall St Engine (@wallstengine) November 9, 2026
Debt and cost savings
Skydance said it had $87 billion in gross debt and $10 billion in cash after completing the Warner Bros. deal. The company expects to burn cash in 2026 but aims to generate $10 billion in positive cash flow by 2030. Those figures put the merger’s cost-savings plan, cash generation and continued content spending at the center of management’s stated financial plan.
Management is targeting more than $6 billion in annual savings within three years. The plan includes combining operations, reducing technology costs and cutting layers of management. At the same time, Skydance said it would continue investing in content, citing a base of more than $30 billion in annual content spending.
The company warned that a weak Warner film slate could reduce fourth-quarter profit by as much as $200 million from earlier expectations. It did not provide full fourth-quarter guidance, saying it would issue full-year outlooks going forward. Those future outlooks will provide additional information on the planned savings, cash-flow target and the financial contribution of the combined company.
Analyst ratings and stock performance
Analyst views remain divided. Before the earnings report, seven of 27 firms tracked by FactSet rated the stock Buy, while eight rated it Sell.
BofA analyst Jessica Reif Ehrlich maintained an Underperform rating and a $9 price target on Tuesday. She described the integration as “daunting” and said it would take “a significant amount of time.” Citizens JMP lowered its price target from $14 to $13 while retaining an Outperform rating. MarketBeat lists a consensus rating of Hold and an average target of $6.42.
UBS analyst John Hodulik estimated last month that about two-thirds of Skydance’s profits still came from linear television. He said much of that business is concentrated in genres that streaming could erode.
Skydance also appointed Marvel veteran Jeremy Latcham to lead DC Studios. He is replacing James Gunn and Peter Safran, who are departing.
The shares reached an intraday low of $7.75 on Tuesday after closing at $8.70 the previous day. The stock’s 50-day moving average was $6.74.
Source: Blockonomi
