Raphael Stevens

Warner Bros. Discovery missed analyst estimates for both revenue and earnings as advertising revenue slumped.
Streaming service Max ended 2023 profitable for the first time.
Studio revenue dropped 17% in part as a result of strikes by Hollywood writers and actors.

The exterior of the Warner Bros. Discovery Atlanta campus is pictured after the Writers Guild of America began their strike against the Alliance of Motion Pictures and Television Producers, in Atlanta, Georgia, U.S. May 2, 2023.
Alyssa Pointer | Reuters

Warner Bros. Discovery missed analyst targets for both profit and revenue in the fourth quarter but boosted free cash flow as its streaming service Max ended 2023 profitable for the first time.
Shares of Warner Bros. Discovery fell about 1% in premarket trading Friday after the report.

Warner Bros. Discovery generated $3.31 billion in free cash flow in the fourth quarter and ended 2023 with $6.16 billion in free cash flow, up 86% from a year prior. Chief Executive Officer David Zaslav has prioritized boosting free cash flow and shrinking the company’s debt. Warner Bros. Discovery paid down $1.2 billion of debt in the quarter and $5.4 billion in debt in 2023. It still has $44.2 billion of gross debt remaining.
The company’s flagship subscription streaming service, Max, ended 2023 profitable, with full-year adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) of $103 million.
Zaslav has dramatically cut content spending for the streaming service since merging WarnerMedia and Discovery in 2022. His efforts have helped Max reach profitability before the streaming divisions of legacy media rivals Disney, Comcast’s NBCUniversal and Paramount Global.
The company reported 97.7 million global direct-to-consumer subscribers, a 2% increase from the previous quarter.
Here’s what the company reported for the quarter ended Dec. 31, versus analysts’ estimates, according to LSEG, formerly known as Refinitiv:

Loss per share: 16 cents vs. 7 cents expected
Revenue: $10.28 billion vs. $10.35 billion expected

President and Chief Executive Officer of Warner Bros. Discovery David Zaslav attends the world premiere of the 4k restorated 1959 movie “Rio Bravo” presented at the Opening Night of the 2023 TCM Classic Film Festival in the TCL Chinese Theatre in Hollywood, California, April 13, 2023.
Aude Guerrucci | AFP | Getty Images

The company’s fourth-quarter net loss was $400 million, or 16 cents per share, compared with a loss of $2.1 billion, or 86 cents per share, during the year-ago period.
Fourth-quarter adjusted EBITDA was $2.5 billion, down 5% from a year ago, excluding the impact of foreign exchange, as studio revenue lagged as a result of strikes by the Writers Guild of America and the Screen Actors Guild-American Federation of Television and Radio Artists.
Studio revenue dropped 17% to $3.17 billion in the quarter. Adjusted EBITDA for the unit fell 29% to $543 million.
Warner Bros. Discovery reported a 14% decline in linear television advertising revenue excluding changes in foreign exchange and a 4% drop in actual distribution revenue.
Given the declines among cable TV subscriptions, Warner Bros. Discovery announced earlier this month it plans to begin a joint venture with Disney and Fox to offer a smaller, less expensive bundle of linear networks that focus on sports programming.
Disclosure: NBCUniversal is the parent company of CNBC.
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In a little over a month since hitting all-time lows, and as its IM-1 mission made its way to the lunar surface, shares of Intuitive Machines climbed more than 300% since early January.
It’s a rally that Wall Street analysts describe as fueled by retail investors’ excitement for the space company’s progress toward an unprecedented goal.
“We’ve never witnessed a publicly traded company go through [a moon landing attempt]. So this is new, not just for investors, but for us analysts as well,” Cantor Fitzgerald’s Andres Sheppard told CNBC.

Intuitive Machines’ Nova-C lander “Odysseus” deploys from the upper stage of SpaceX’s Falcon 9 rocket to begin the IM-1 mission.

Much like Intuitive Machines’ spacecraft, its stock has been flying to the moon the past week.
In a little over a month since hitting all-time lows, and as its IM-1 mission made its way to the lunar surface, shares of Intuitive Machines have more than tripled since early January. It’s a rally that Wall Street analysts describe as fueled by retail investors’ excitement for the space company’s progress toward an unprecedented goal.

The Texas-based lunar company’s stock, with the apt ticker of “LUNR,” now trades for about $8 per share as of Thursday’s close, a far cry from January lows of closer to $2. At one point this week, as IM-1 progressed through milestones ahead of its landing attempt — the stock reached over $13 in trading.
In the moments after the lander, named “Odysseus” after the figure in Greek mythology, successfully touched down on the moon’s surface, the stock surged once again.
“We’ve never witnessed a publicly traded company go through [a moon landing attempt]. So this is new, not just for investors, but for us analysts as well,” Cantor Fitzgerald’s Andres Sheppard told CNBC.
Sheppard compared Intuitive Machine’s landing to a biotech company waiting on a FDA approval for a new drug: “It’s a bit of a binary outcome,” Sheppard said.
While Sheppard expected Intuitive’s stock price to climb after a successful landing, potentially as high as $15 a share, he cautioned “that valuation is certainly ahead of the company’s financials” — as “people are getting caught up” in the excitement and history of IM-1 landing on the moon, he said.

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Intuitive Machines stock trading around its IM-1 moon mission.

Intuitive went public via a SPAC merger less than a year ago, and has spent most of that time trading below its debut pricing. Only a handful of Wall Street analysts cover the $1 billion space company. Of the firms listed by FactSet as covering Intuitive Machines, all four analysts have buy equivalent ratings on the stock – and all four have seen the stock blow past their pre-launch price targets.

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Beyond the technological and financial progress IM-1 represents for Intuitive Machines, analysts pointed to the enthusiasm for the first U.S. landing on the moon in over 50 years, as well as the first by a corporate entity, rather than a government agency.
“We get to see how these applications in space can capture the imagination and vision of investors … hopefully it is successful, as I think that will do a lot for the space industry as a whole,” Benchmark analyst Josh Sullivan told CNBC prior to the lunar landing.
Along with Canaccord Genuity analyst Austin Moeller, Sullivan and Sheppard were unanimous in their reads that retail, not institutional, investors are driving the current Intuitive Machines’ rally. Sheppard said his firm estimates about 80% of trading over the past week was done by retail traders.
“There’s huge momentum being driven by the retail community behind this,” Sheppard said.
Sullivan also cited the global news coverage of Intuitive’s mission as another driver, giving the company a wider exposure.
“The successful milestones are adding up to a point where [a moon company] is becoming a commercial reality, and I think that’s starting to catch on,” Sullivan said.

Passing milestones

IM-1 made steady progress through the 16 milestones the company outlined before the launch. Yet Intuitive is not just clearing the technological hurdles that come with a first spaceflight, but also checking boxes to get paid by its biggest customer.

Intuitive Machines and NASA leaders showcase a mockup of the company’s Nova-C lunar lander during a presentation on May 31, 2019.
Aubrey Gemignani / NASA

The mission is under an $118 million contract with NASA, with necessary milestones for payment. But, as Sullivan noted, IM-1 represents more than just getting paid for an existing contract.
“It is really about proving a track record of success in the very harsh environment of space, so that in the future when they’re going to NASA … the likelihood of them winning those very large contracts increases pretty substantially,” Sullivan said.
A key element of NASA’s Commercial Lunar Payload Services (CLPS) program is the competitive nature between companies bidding to deliver cargo on future moon missions. One of Intuitive Machines’ competitors, Astrobotic, had a crippling problem during its inaugural moon mission last month that kept the company from attempting a landing.
Both companies, as well as others, have already won NASA contracts for additional missions. Analysts see Intuitive’s progress thus far as a key differentiator in future bids. More

Intuitive Machines’ Nova-C cargo lander, named “Odysseus” after the mythological Greek hero, is the first U.S. spacecraft to soft land on the lunar surface since 1972.
Intuitive Machines is the first company to pull off a moon landing — government agencies have carried out all previously successful missions.
The company’s stock surged in extended trading Thursday, after falling 11% in regular trading.

The IM-1 lander “Odysseus” in lunar orbit on Feb. 21, 2024.
Intuitive Machines

A U.S. company has gone to the moon – and into the history books.
Intuitive Machines IM-1 mission reached the moon’s surface on Thursday evening, in the first American lunar landing since the Apollo era.

The company’s Nova-C cargo lander, named “Odysseus” after the mythological Greek hero, is the first U.S. spacecraft to land on the lunar surface since 1972. Adding to the feat, Intuitive Machines is the first company to pull off a moon landing — government agencies have carried out all previously successful missions.
“We are on the surface and we are transmitting. Welcome to the moon,” Intuitive Machines’ CEO Steve Altemus said from mission control.
There was a delay, as expected, between the landing and when engineers were able to assess its success.
A few minutes after the expected landing time, Intuitive Machines’ mission control was still trying to reconnect communications with the spacecraft to confirm whether it landed. The company’s mission control ultimately picked up a signal and announced its lander was on the surface.
“What we can confirm, without a doubt, is that our equipment is on the surface of the moon and we are transmitting. So congratulations, IM-1,” Tim Crain, Intuitive Machines’ CTO and IM-1 mission director, said.

“Odysseus has found his new home,” Crain added.
The company’s stock surged in extended trading Thursday, after falling 11% in regular trading to close at $8.28 a share.
Intuitive Machines, a Houston, Texas-based company founded in 2013, went public a year ago. After shares hit an all-time low in early January, the stock has surged and more than tripled – a rally that Wall Street analysts describe as fueled by investor excitement around the IM-1 mission’s progress.

Odysseus’ journey

The lander began a series of maneuvers about one hour before touching down, starting with “Descent Orbit Insertion.

An illustration of the IM-1 mission, with milestones from launch to landing.
Intuitive Machines

IM-1 landed in the “Malapert A” crater, about 300 kilometers from the moon’s south pole. After landing, Intuitive Machines aims to operate Odysseus on the surface for up to seven days.
The mission launched on a SpaceX rocket on Feb. 15. It is carrying 12 government and commercial payloads — six of which are for NASA under an $118 million contract.

Intuitive Machines and NASA leaders showcase a mockup of the company’s Nova-C lunar lander during a presentation on May 31, 2019.
Aubrey Gemignani / NASA

The hexagonal lander is 4.3 meters (or about 14 feet) tall, and its legs spread 4.6 meters (or about 15 feet) wide, making the spacecraft about the size of an SUV stood on its end.

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NASA leadership emphasized before the launch that “IM-1 is an Intuitive Machines’ mission, it’s not a NASA mission.” IM-1 marks the second mission under NASA’s Commercial Lunar Payload Services (CLPS) initiative, which aims to deliver science projects and cargo to the moon with increasing regularity in support of the agency’s Artemis crew program.
“Today, for the first time in more than a half century, the U.S. has returned to the moon. Today, for the first time in the history of humanity, a commercial company and an American company launched and led the voyage up there,” NASA Administrator Bill Nelson said on the livestream

Intuitive Machines’ Nova-C lunar lander on display at NASA’s Marshall Space Flight Center.

Lunar geopolitics

IM-1 is also the latest move in a broader geopolitical race to the moon. While Intuitive Machines represents the latest American effort, other nations – both U.S. rivals and allies – are pouring money into lunar programs.
Last month, Japan became the fifth country to land on the moon, following Russia, the U.S., China and India.
Governments and private companies alike have made more than 50 attempts to land on the moon with mixed success since the first attempts in the early 1960s, and the track record has remained shaky even in this century. But that’s not deterring the modern moon race that’s now well underway.
NASA expects U.S. companies to launch additional missions this year, while China plans to launch its next lunar lander in May.  More

Shares of electric vehicle makers Rivian and Lucid fell Thursday after the companies reported stagnant production in their fourth-quarter earnings after the bell Wednesday.
Rivian shares sank about 25%, and Lucid’s stock dropped around 17%.
Rivian forecast it will make 57,000 vehicles in 2024, slightly less than the 57,232 vehicles it produced in 2023. Lucid said it expects to make 9,000 vehicles in 2024, more than the 8,428 vehicles it made in 2023.

A Rivian electric truck sits parked in front of a Rivian service center on August 08, 2023 in South San Francisco, California.
Justin Sullivan | Getty Images

Shares of electric vehicle makers Rivian and Lucid plummeted Thursday after the companies reported disappointing results and stagnant production in their fourth-quarter earnings after the bell Wednesday.
Rivian shares plunged about 25% and Lucid’s stock sank almost 17% on Thursday.

Rivian forecast it will make 57,000 vehicles in 2024, slightly less than the 57,232 vehicles the company produced last year. Lucid said it expects to make 9,000 vehicles in 2024, about 7% more than the 8,428 vehicles it made in 2023.
Rivian’s revenue of $1.32 billion for the quarter beat Wall Street estimates, but its net loss per share of $1.36 was worse than expected, according to a survey of analysts by LSEG, formerly known as Refinitiv. The company also announced Wednesday it would cut 10% of its workforce.
“Our business is not immune to existing economic and geopolitical uncertainties, most notably the impact of historically high interest rates, which has negatively impacted demand,” Rivian CEO RJ Scaringe said on Wednesday’s earnings call.
Lucid reported lower-than-expected revenue of $157.2 million for the quarter, and its net loss of 30 cents per share was in line with estimates, according to analysts surveyed by LSEG.
Lucid CEO Peter Rawlinson said the macroeconomic environment and higher interest rates also affected the company. He said the company has had to learn to operate in new locations, such as Saudi Arabia, with different market dynamics.

Though companies have invested billions of dollars in EVs, sales have grown more slowly than expected. EVs made up 6.9% of sales heading into December, or roughly 976,560 units, up 1.7 percentage points compared with total sales in 2022. 
Rivian and Lucid make up a fraction of EV sales compared with the industry leader, Tesla. A Cox Automotive analysis found that Rivian accounted for just over 4% of EV sales in 2023, while Lucid made up 0.5%. Tesla controlled about 55% of the market.
Shares of Rivian have dropped about 40% in the past year and have fallen 85% from their initial public offering price of $78 a share in November 2021. Lucid’s stock is down about 70% in the past year and has dropped more than 75% from its IPO price of $14 a share in October 2021.
Rivian and Lucid weren’t the only EV producers Wall Street was watching Thursday.
Electric truck maker Nikola reported worse-than-expected revenue and a slightly better-than-expected loss per share in its earnings Thursday. The stock traded about flat Thursday, and has lost nearly all of its value since it hit an all-time high of $93.99 in June 2020.
— CNBC’s Michael Wayland contributed to this report. More

The nation’s millionaires and billionaires are evading more than $150 billion a year in taxes, according to the head of the Internal Revenue Service.
The IRS, with billions of dollars in new funding from Congress, has launched a sweeping crackdown on wealthy individuals, partnerships and large companies, Commissioner Danny Werfel told CNBC.
“We have to make investments to make sure that whether you’re a complicated filer who can afford to hire an army of lawyers and accountants, or a more simple filer who has one income and takes the standard deduction, the IRS is equally able to determine what’s owed,” he said.

The nation’s millionaires and billionaires are evading more than $150 billion a year in taxes, adding to growing government deficits and creating a “lack of fairness” in the tax system, according to the head of the Internal Revenue Service.
The IRS, with billions of dollars in new funding from Congress, has launched a sweeping crackdown on wealthy individuals, partnerships and large companies. In an exclusive interview with CNBC, IRS Commissioner Danny Werfel said the agency has launched several programs targeting taxpayers with the most complex returns to root out tax evasion and make sure every taxpayer contributes their fair share.

“When I look at what we call our tax gap, which is the amount of money owed versus what is paid for, millionaires and billionaires that either don’t file or [are] underreporting their income, that’s $150 billion of our tax gap,” Werfel said. “There is plenty of work to be done.”
Werfel said that a lack of funding at the IRS for years starved the agency of staff, technology and resources needed to fund audits — especially of the most complicated and sophisticated returns, which require more resources. Audits of taxpayers making more than $1 million a year fell by more than 80% over the last decade, while the number of taxpayers with income of $1 million jumped 50%, according to IRS statistics.

“For complex filings, it became increasingly difficult for us to determine what the balance due was,” he said. “So to ensure fairness, we have to make investments to make sure that whether you’re a complicated filer who can afford to hire an army of lawyers and accountants, or a more simple filer who has one income and takes the standard deduction, the IRS is equally able to determine what’s owed. And to us, that’s a fairer system.”
Some Republicans in Congress have ramped up their criticism of the IRS and its expanded enforcement efforts. They say the wave of new audits will burden small businesses with unnecessary bureaucracy and years of fruitless investigations and won’t raise the promised revenue.
The Inflation Reduction Act gave the IRS an $80 billion infusion, yet congressional Republicans won a deal last year to take $20 billion of the funding back. Now they’re pressing for further cuts.

The Treasury Department said last week it estimates greater IRS enforcement will result in an additional $561 billion in tax revenue between 2024 and 2034 — a higher projection than it had initially stated. The IRS says that for every extra dollar spent on enforcement, the agency raises about $6 in revenue.
The IRS is touting its early success with a program to collect unpaid taxes from millionaires. The agency identified 1,600 millionaire taxpayers who have failed to pay at least $250,000 each in assessed taxes. So far, the IRS has collected more than $480 million from the group “and we are still going,” Werfel said.

Danny Werfel, commissioner of the Internal Revenue Service (IRS), speaks after being ceremonially sworn in at the IRS headquarters in Washington, DC, US, on Tuesday, April 4, 2023. 
Ting Shen | Bloomberg | Getty Images

On Wednesday, the agency announced a program to audit owners of private jets, who may be using their planes for personal travel and not accounting for their trips or taxes properly. Werfel said the agency has started using public databases of private-jet flights and analytics tools to better identify tax returns with the highest likelihood of evasion. It is launching dozens of audits on companies and partnerships that own jets, which could then lead to audits of wealthy individuals.
Werfel said that for some companies and owners, the tax deduction from corporate jets can amount to “tens of millions of dollars.”
Another area that is potentially rife with evasion is limited partnerships, Werfel said, adding that many wealthy individuals have been shifting their income to the business entities to avoid income taxes.
“What we started to see was that certain taxpayers were claiming limited partnerships when it wasn’t fair,” he said. “They were basically shielding their income under the guise of a limited partnership.”
The IRS has launched the Large Partnership Compliance program, examining some of the largest and most complicated partnership returns. Werfel said the IRS has already opened examinations of 76 partnerships — including hedge funds, real estate investment partnerships and large law firms.
Werfel said the agency is using artificial intelligence as part of the program and others to better identify returns most likely to contain evasion or errors. Not only does AI help find evasion, it also helps avoid audits of taxpayers who are following the rules.
“Imagine all the audits are laid out before us on a table,” he said. “What AI does is it allows us to put on night vision goggles. What those night vision goggles allow us to do is be more precise in figuring out where the high risk [of evasion] is and where the low risk is, and that benefits everyone.”
Correction: The IRS has collected $480 million from a group of millionaire taxpayers who had failed to pay. An earlier version misstated the amount collected. More