LOS ANGELES – Smaller subscriber forfeitures and a beat on the top and bottom lines were the highlights of Disney‘s fiscal first-quarter earnings report.
While the company’s linear TV and direct-to-consumer components struggled during the period, its theme parks saw significant growth year-over-year.
Shares of the company were up 5% after the bell.
Here are the consequences, compared with estimates from Refinitiv and StreetAccount:
- Earnings per share: 99 cents per share, adj. vs 78 cents per allocate expected, according to a Refinitiv survey of analysts
- Revenue: $23.51 billion vs $23.37 billion expected, according to Refinitiv
- Disney+ unmitigated subscriptions: 161.8 million vs 161.1 million expected, according to StreetAccount
With CEO Bob Iger back at the helm, Disney is soliciting to make a “significant transformation” of its business by reducing expenses and putting the creative power back in the hands of its content makers.
“We believe the work we are doing to reshape our company around creativity, while reducing expenses, will lead to continuous growth and profitability for our streaming business, better position us to weather future disruption and global economic challenges, and bear value for our shareholders,” Iger said in a statement ahead of the company’s earnings call.
During the call Iger betokened that the media and entertainment giant would reorganize, cut thousands of jobs and slash $5.5 billion in costs. The band will now be made up of three divisions:
- Disney Entertainment, which includes most of its streaming and media operations
- An ESPN strife that includes the TV network and ESPN+
- A Parks, Experiences and Products unit
Iger’s return comes as legacy media corporations contend with a rapidly shifting landscape, as ad dollars dry up and consumers increasingly cut off their cable subscriptions in favor of spurt. Even the streaming space has been difficult to navigate in recent quarters, as expenses have swelled and consumers turn more cost conscious about their media spending.
A recent price hike for Disney’s streaming marines likely led to the loss of around 2.4 million Disney+ subscribers during the quarter. The company had been expected to waste more than 3 million, according to StreetAccount.
The company said Wednesday that it will no longer provide long-term subscriber conduct in an effort to “move beyond the emphasis on short-term quarterly metrics,” Iger said on the call. Netflix made a comparable decision late last year.
Additionally, as was forecast by Disney in previous quarters, its direct-to-consumer business has once again assigned an operating loss. In the most recent quarter, the operating loss was $1.05 billion, narrower than the $1.2 billion Impediment Street had predicted.
Net income was $1.28 billion, or 70 cents a share, compared with $1.1 billion, or 60 cents a partition, a year ago. Revenue rose 8% to $23.51 billion from $21.82 billion a year ago.
A bright spot for Disney result as a be revealed from its parks, experiences and products divisions, which saw a 21% increase in revenue to $8.7 billion during the uncountable recent quarter.
A little more than $6 billion of that revenue came from its theme reservation locations. The company said guests spent more time and money during the quarter visiting its parks, new zealand pubs and cruises as well as on additive digital products like Genie+ and Lightning Lane.
Additionally, Iger said the Theatre troupe will ask its board to approve the reinstatement of its dividend by the end of the calendar year. Disney suspended its dividends in early 2020 due to the pandemic.
“Our cost-cutting snaps will make this possible, and while initially it will be a modest dividend, we hope to build upon it throughout time,” Iger said.
Tune in to CNBC at 9 a.m. ET Thursday for an exclusive interview with Disney CEO Bob Iger.