ANGELES, CA Disney’s earnings beat forecasts, partly because of the company’s profit at ESPN+ and its theme parks’ ongoing expansion, but the top line was negatively impacted by a drop in ad revenue.
Disney added that it intends to keep up its “aggressive management” of its cost base, boosting its cost-cutting initiatives by an extra $2 billion to reach a goal of $7.5 billion.
Following the closing bell on Wednesday, the company’s shares increased by over 4%.
Disney’s ABC Network and other owned TV stations saw lower political advertising revenue during the quarter, which was the main cause of the decline in ad revenue. CEO Bob Iger hinted that the business might consider selling its television assets over the summer.
In the meantime, the business added 7 million new core Disney+ members from the prior quarter, bringing its total user base—including Hot star—to 150.2 million. Additionally, the streaming company reduced its losses from the previous year.
Disney was expected by Wall Street to report 148.15 million total subscribers for the quarter. The business highlighted the addition of major streaming content over the previous three months, including the new Star Wars series “Ahsoka” and theatrical releases like “Elemental,” “Little Mermaid,” and “Guardians of the Galaxy: Vol. 3.”
The company is still projecting that in the fiscal fourth quarter of 2024, its combined streaming businesses will turn a profit.
“Achieving significant and sustained profitability in our streaming business, transforming ESPN into the leading digital sports platform, enhancing the output and economics of our film studios, and accelerating growth in our parks and experiences business are the four key building opportunities that will be central to our success going forward,” CEO Bob Iger stated in a statement on Wednesday.
The following are the main figures from Disney’s report:
- LSEG, formerly known as Refinitiv, reported adjusted earnings per share of 82 cents compared to expected earnings of 70 cents.
- Revenue was $21.24 billion as opposed to expected revenue of $21.33 billion.
- As per Street Account, there are 150.2 million total Disney+ subscribers, which is less than the expected 148.15 million.
For the fiscal fourth quarter that concluded on September 30, the company reported net income of $264 million, or 14 cents per share. This represents an increase from the previous year’s net income of $162 million, or 9 cents per share.
Wall Street had predicted that the company would make 70 cents per share, but after impairments, it made 82 cents per share.
Revenue climbed by 5% to $21.24 billion, falling just short of projections that predicted $21.33 billion in revenue. Disney has missed revenue for the second time in a row, and it hasn’t done so since the beginning of 2018.
Disney has divided the company into three divisions: experiences, sports, and entertainment. This is also the first quarter that the company is using the new financial reporting structure.
Experiences includes the theme parks, hotels, cruise line, and retail endeavors of the company; sports includes ESPN; and entertainment includes all of Disney’s streaming and media operations.
During the quarter, Disney’s experience division saw a 13% increase in revenues to $8.16 billion, driven by higher park attendance and domestic and international ticket prices. The company stated that although operating costs are higher in the Florida resort, hotel rates are still lower there. Approximately 66% of this division’s total revenue came from parks.
