The Walt Disney Company missed Wall Street’s expectations Wednesday when the company reported weaker-than-expected revenue for the past quarter.
“Our results this quarter reflect the significant progress we’ve made over the past year,” CEO Bob Iger said in a statement. “While we still have work to do, these efforts have allowed us to move beyond this period of fixing and begin building our business again.”
Disney’s stock is up 4% in after-hours trading, bouncing off a nearly 10-year low.
The company reported revenue of $21.2 billion, coming in slightly below expectations of $21.3 billion, according to estimates from analysts surveyed by Refinitiv.
Disney’s report comes during a rocky period for the company as it grapples with a streaming business burning through cash, cord cutting, a recent string of box office flops, an ongoing actors strike and legal battles with Republican presidential candidate Florida Gov. Ron DeSantis.
The company said it was “aggressively managing its cost base,” planning to slash $2 billion more in costs than previously reported. Disney previously announced 7,000 job cuts in February as part of a $5.5 billion cost saving plan. On Wednesday, the company said its efficiency target had grown to $7.5 billion. While no job cuts were announced, the increased cost cuts may indicate future layoffs.
Disney’s theme park division was a bright spot for the company, increasing by over 30% compared to last year. The company pointed to strength in its international theme parks and Disney cruises. However, the company said revenues for Walt Disney World in Central Florida were weaker.
The company’s fiscal fourth quarter began in July and ended in October of this year, and included the summer slump seen at Walt Disney World Resort in Central Florida. In July, Disney World parkgoers experienced shorter-than-expected ride wait times and fewer crowds than expected.
Disney+, Disney’s flagship streaming service, increased its subscriber base in the US and Canada by 1% in the quarter, and added 11% more subscribers internationally.
Ad-supported Disney+ added more than 2 million subscriptions in the fourth quarter, Iger said.
Disney’s streaming operation reported a loss of $420 million for the quarter.
In total, Disney has lost more than $10 billion on its streaming service venture since it was introduced in 2019.
On Disney’s earnings call, Iger reiterated that the company is “confident” that its streaming services will achieve profitability by the end of 2024.
“We are bullish about the future of our streaming business,” Iger said.
In October, Disney hiked the price of ad-free Disney+ subscription to $13.99 per month but kept the price of its advertising tier steady at $7.99 per month.
This is a developing story and will be updated.
Read the full article here