Walt Disney outperformed earnings forecasts of the Wall Street on Wednesday, offsetting a drop in advertising income for television network ABC with increased attendance in its theme parks in Hong Kong and Shanghai.
After-hours trading saw a 3% increase in the entertainment company's shares to $87.14, indicating investor confidence in CEO Bob Iger's relentless cost-cutting, the corporation's better-than-expected increases in streaming subscribers, and Iger's statement that Disney had once again entered a "building" period.
LSEG data shows that Disney posted adjusted earnings of 82 cents per share for the fiscal fourth quarter that ended on September 30, exceeding an average estimate of 70 cents. The $21.2 billion in revenue for the quarter was mainly in accordance with consensus expectations.
The firm claims to have added approximately 7 million Disney+ streaming members in the quarter. 150.2 million people are subscribers to Disney+ and Disney+ Hotstar combined, which is more than the 147.4 million estimated by Visible Alpha.
Iger stated that they have come a long way in the last year, as seen by their results in this quarter, and even though there is still more work to be done, these initiatives have given them the opportunity to go past the repairing phase and resume expanding their business.
Disney claims that because of its proactive cost management, it is on target to realize a yearly savings of $7.5 billion.
Activist stakeholder Nelson Peltz is putting the century-old entertainment behemoth under strain once again. In January, Trian had sought one board seat; however, once Iger presented restructuring proposals intended to save $5.5 billion, the proxy fight ended a month later.
The company's achievements demonstrate a razor-sharp attention to efficiency throughout the board while emphasizing content. In this new world of streaming, Disney has a much larger reach than its competitors.
The consequences of two strikes in Hollywood and a sluggish advertising market could hurt Warner Bros Discovery's profitability into the following year, the firm said earlier on Wednesday, sending its shares down 19%.
The 148-day shutdown of work by movie and television writers ended in September when they accepted a fresh three-year contract. However, the SAG-AFTRA actors union has been on strike since July, which has disrupted the industry's 2024 movie slate and prevented media businesses from releasing new content.
Disney's streaming platforms, which also contain ESPN+ and Hulu, saw a decrease in quarterly losses to 387 million dollars from 1.47 billion in the previous year as a result of price increases and improved ad income. Disney stated that by September 2024, its streaming division is expected to turn a profit. A bundled Hulu and Disney+ app will go live in beta form in December, with a complete launch scheduled for the spring, according to Iger.
A 31% increase in operating income to about $1.8 billion was recorded in the quarter by Disney's newly renamed Experiences segment, which encompasses its consumer items, cruise lines, as well as theme parks and resorts. Walt Disney World in Florida saw lower results, but growth in the cruise industry and higher visitor numbers at the Hong Kong Disneyland, Shanghai Disney, and Disneyland resorts helped offset the decline.
A year earlier, Disney's Entertainment sector lost $608 million in operational income. This quarter, the unit reported operational income of $236 million, which involves its television networks, film studio, and Disney+ and Hulu services.
The corporation's sports division, posted $981 million in operating income for the same period last year, a 14% increase.
ESPN's results showed reduced programming expenditures. Additionally, the unit benefited from a rise in ESPN+ subscription revenue brought about by price increases and user growth.
ESPN attracted its largest viewership in the highly sought-after 18–49-year-old demographic, according to Iger, and its best total viewing in four years. He noted that as it gets ready to move ESPN to streaming, the firm is looking for partners.