Theme parks power Disney's Q4 profit, streaming losses shrink
Walt Disney Co. had a strong Q4 earnings report, mainly driven by its profitable theme parks, which saw a 31% increase in earnings to $1.76 billion. The consumer products division also performed well, with a 12% revenue growth. Disney's streaming business, including ESPN+, reduced losses to $387 million, exceeding Wall Street's predictions. Disney aims to turn profitable in this sector by the fourth quarter of the new fiscal year.
Disney beats earnings estimates
After announcing better-than-expected results and plans to cut an extra $2 billion in expenses, Walt Disney's stock price increased by over 3% to $87.3 apiece. Walt Disney's adjusted earnings per share for the fiscal fourth quarter ended on September 30 were 82 cents, surpassing the average forecast of 70 cents, according to LSEG data. The company's quarterly revenue of $21.2 billion closely matched consensus estimates, as reported by Reuters.
Disney+ subscriber growth surpasses expectations
Worldwide, Disney+ paying subscribers exceeded 150.2 million, outpacing the projected 147.4 million and marking a return to growth in sign-ups. Core Disney+ subscribers expanded by 7% to 112.6 million. In response to these outcomes, Disney shares climbed approximately 2% in extended trading following the announcement. The stock had declined nearly 8% since Bob Iger resumed his role as CEO last November after the removal of his successor, Bob Chapek.
Peltz's demands and Iger's response
Since Iger's return as CEO, activist investor Nelson Peltz has contended that Disney's expenses are excessive. He also said its board should be more accountable in areas like succession planning, and the company should reinstate dividend payments. Disney previously expressed its intention to distribute a modest dividend to shareholders this year. Peltz's holdings consist of shares pledged by Ike Perlmutter, the former Marvel Entertainment Chairman, who was dismissed by Iger after advocating for Peltz to join Disney's board.
Repositioning Disney amid traditional TV network struggles
Iger is looking into how to reshape Disney's strategy because its traditional TV networks like ABC, National Geographic, and FX are still losing both viewers and advertisers. The earnings from the company's entertainment networks stayed roughly the same at $805 million, but the revenue dropped by 9.1% to $2.63 billion. Disney, like other broadcasters, is dealing with a drop in advertising sales and lower income from subscribers for its traditional TV networks.
