Disney stock rises earnings beat increases cost-cutting plan $2BN
Disney's revenues are below expectations, but the company's earnings and streaming business are improving, and they plan to achieve cost cuts.
Disney's revenues for the quarter and year both saw growth, increasing by 5% and 7% respectively compared to the prior-year figures. However, the numbers fell short of expectations, coming in at $21.2 billion, slightly below the estimated $21.4 billion. On a positive note, earnings for the world's largest entertainment company exceeded expectations, reaching 82c, surpassing the anticipated 69c.
The first anniversary of Bob Iger's return as chief executive of the Walt Disney Company brought positive news for Disney+, with subscribers surpassing expectations and reaching 150.2 million, beating the expected 147.07 million. However, ESPN+ and Hulu subscribers and ARPUs failed to meet expectations.
Despite this, Disney's streaming business, including ESPN+, saw losses narrow to $387 million in the quarter, performing better than what was projected by Wall Street. The company also announced a more ambitious plan for cost cuts across the organization, aiming for $7.5 billion in annualized cost efficiencies, up from the initially targeted $5.5 billion.
Robert A. Iger, CEO of The Walt Disney Company, expressed optimism about the company's progress, highlighting the significant advancements made over the past year. He emphasized the importance of the restructuring and cost efficiency work, as well as the strong foundation of creative excellence and innovation built over the past century.
Looking ahead, Iger outlined four key building opportunities for Disney's success, including achieving significant and sustained profitability in the streaming business, building ESPN into a leading digital sports platform, improving the output and economics of the film studios, and accelerating growth in the parks and experiences business. He expressed confidence in the company's ability to create lasting growth and increase shareholder value. DIS shares saw an increase after hours, and Iger remains bullish about the opportunities ahead for Disney.