Skydance shares jump 8.61% as company unveils $6 billion savings plan
Key Facts
Skydance shares rose 8.61% in trading on November 9, closing at $8.70, as the company disclosed details of a plan to cut costs by $6 billion over three years, according to Reuters and EL7 data. The company aims to achieve 30% of the savings in the first year as it integrates operations following its acquisition of Warner Bros. Discovery. The plan puts expense cuts at the center of the company's efforts to manage its debt burden and improve operating efficiency. The announcement came on the same day the company released third-quarter results, allowing investors to assess the savings plan alongside the performance of its business segments. The stock's rise reflects the session's move as reported by Reuters, not a decline in response to the cost plan.
Revenue reached $7.025 billion in the third quarter of 2026, up 5% year over year, according to the results table filed with the U.S. Securities and Exchange Commission. The company reported net income attributable to the parent of $73 million and diluted earnings per share of $0.06. Operating income was $368 million, including $187 million in restructuring and transaction costs. Adjusted earnings before interest, taxes, depreciation and amortization were $1 billion, with a 14.2% margin. The figures show integration and restructuring costs coinciding with the company's continued generation of adjusted operating profit during the quarter.
The company's businesses diverged across streaming and traditional television. Paramount+ revenue rose 21% year over year, with subscriber numbers up about 6% and average revenue per user up about 14%, according to the company's disclosure. Direct-to-consumer revenue increased 11% to $2.5 billion. By contrast, television revenue fell 7% to $3.0 billion, while studios revenue rose 23% to $1.5 billion. The contrast sets growth in streaming and studios against weakness in television in the same period's results.
The targeted savings are spread across several operating areas, according to details reported by Reuters. The plan includes cutting at least $2.2 billion in overhead and real estate costs, and $1 billion in marketing expenses, equivalent to 20% of those expenses. The company also aims to save about $1.4 billion in technology costs. The company said it expects to deliver 30% of total savings in the first year, with implementation of the plan extending over three years. These measures link spending cuts with the reorganization of operations brought together by the acquisition.
The cost-cutting plan faces a balance sheet burdened by debt since the acquisition: Skydance now carries $87 billion in total debt, with about $10 billion in cash, according to Reuters. The scale of its obligations makes operating savings central to the company's financial trajectory, alongside growth in new revenue sources. On streaming, Reuters said the company will launch a bundle combining HBO Max and Paramount+ in early 2027. The initiative follows third-quarter growth in Paramount+ revenue, while traditional television revenue declined. The bundle's launch will put efforts to integrate streaming services and expand the company's offerings to subscribers to a practical test.
The company said Warner Bros.' film slate in the fourth quarter underperformed earlier expectations, which could reduce quarterly profit by up to $200 million. That factor adds near-term pressure to the company's results as it begins implementing the savings plan. Skydance did not provide its full fiscal 2027 outlook in its third-quarter results announcement. It said it would release that outlook when it reports fourth-quarter 2026 results. That will be the next milestone for assessing the impact of integration costs, film performance and the savings trajectory on the company's guidance.