Disney reported better-than-expected quarterly earnings, driven by increased theme park attendance, cost-cutting efforts, and reduced losses in its streaming business. The company’s CEO, Bob Iger, declared that Disney is entering a new rebuilding phase following a significant restructuring, with cost-cutting efforts expected to reach around $7.5 billion, a $2 billion increase from the previously announced $5.5 billion target.
Disney’s revenue for the quarter ending on September 30, rose by 5% to $21.24 billion, although it fell slightly short of expectations. The growth in Disney’s theme parks and reduced streaming losses played a significant role in surpassing earnings expectations. For the quarter, Disney’s net income increased by 63% to $264 million, or 14 cents per share.
However, Disney’s TV stations, such as ABC, experienced a slump in ad revenue, leading to Disney reporting its second-straight revenue miss. Iger had previously mentioned exploring the sale of the company’s TV properties, including National Geographic, FX, ABC, and others. Additionally, he is considering selling a minority stake in the sports network ESPN.
In the entertainment division, Disney reported $9.5 billion in revenue, with more than $5 billion coming from direct-to-consumer services. The streaming business, which includes Disney+, Hulu, and ESPN+, reduced its losses to $387 million in the quarter, down from $1.47 billion a year earlier.
Disney’s sports unit, ESPN, reported slightly increased revenue of $3.8 billion, with operating income rising by 16% to $987 million. In the theme parks and experiences segment, Disney saw a 13% increase in revenue to $8.2 billion, with operating income rising by 31% to $1.8 billion. Higher attendance at Disney’s parks and the growth of its cruise business offset lower results at Walt Disney World in Florida.
Disney’s stock price has had a challenging year, falling below $90 for most of the year, which is less than half of its share price just two years earlier. The company is currently facing a proxy battle with activist shareholder Nelson Peltz, who is seeking board seats.
