Warner Bros. Discovery (WBD) will report second quarter earnings after the bell on Wednesday as the media giant struggles with a declining linear TV business, unfavorable ad market, and the loss of its key NBA media rights.

Investors will be closely watching for further commentary on the loss of those rights, especially after WBD filed a lawsuit against the NBA over what it said was the league's "unjustified rejection" of the company's matching rights proposal.

Here's what Wall Street expects for the second quarter, according to Bloomberg estimates:

• Revenue: $10.12 billion versus $10.36 billion in Q2 2023

• Adjusted loss per share: -$0.19 versus -$0.51 in Q2 2023

• Subscriber net additions: 1.89 million versus 1.80 million in Q2 2023

In May, the company reported a profitable direct-to-consumer (DTC) division for the first quarter, posting $86 million in profit, a $36 million year-over-year improvement. The positive results came after the company turned a profit for its streaming unit for full year 2023, posting $103 million in EBITDA compared with a loss of about $2.1 billion in full year 2022.

WBD CFO Gunnar Wiedenfels said during the company's first quarter earnings call that he expects the company to remain profitable in its DTC segment throughout 2024, despite heavy launch investments overseas.

"I remain fully confident in our path to achieve our $1 billion-plus EBITDA target for 2025 and our growth ambitions thereafter," Wiedenfels said at the time.

In its latest media rights negotiations, the NBA passed on WBD in favor of two newcomers: tech giant Amazon (AMZN) and Comcast's NBCUniversal (CMCSA). The league was able to strike a new rights agreement with its other current media partner, Disney (DIS). WBD's current rights will expire at the end of next season.

The company has struggled in recent quarters, with profits hit by a weak linear advertising environment and pressure on affiliate fees, or the fees pay TV providers pay to network owners to carry their channels.

That's likely to impact second quarter EBITDA and put full-year adjusted EBITDA at risk of falling below $10 billion, according to the latest Bloomberg estimates. That's $4 billion below what analysts had expected at the time of its merger.

Still, Wall Street analysts have cited several tailwinds for the company heading into the second half of the year, including WBD's upcoming sports streaming partnership with Disney (DIS) and Fox (FOXA), along with its Max streaming service recently launching in markets outside of the US, including Latin America and Europe.

Increased bundling with competitors should also provide another lever for profitability, in addition to fresh price hikes. The company raised the price of its ad-free plans on its streaming service, Max, in June.

Still, it remains an uphill battle for the stock with shares down 30% since the start of the year. Linear ad revenue is expected to have dropped another 8% in the second quarter after falling 11% in Q1.

Rumors have swirled about the company's next move, with Bank of America analysts laying out possible strategic options in a recent report that could include a split of the company's digital streaming and studio businesses from its legacy linear TV unit.

The company has also committed to aggressive cost cuts, which have helped boost free cash flow. Earlier this summer, the company reportedly laid off another 1,000 or so employees across multiple business sectors after it eliminated the positions of around 100 employees at its CNN network.

Alexandra Canal is a Senior Reporter at Yahoo Finance. Follow her on X @allie_canal, LinkedIn, and email her at [email protected].

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