US Markets
Wednesday, February 7th, 2024 9:27 pm EDT
Key Points
- Walt Disney Company reported better-than-expected fiscal first-quarter earnings, attributing it to cost-cutting measures amidst stagnant revenue.
- The company raised its fiscal 2024 earnings per share guidance to approximately $4.60, marking a potential 20% increase from 2023, while also progressing towards its goal of slashing costs by $7.5 billion by the end of fiscal 2024.
- Despite a decline in Disney+ core subscribers and an operating loss in the direct-to-consumer unit, Disney narrowed losses across all streaming businesses, and announced plans for a new sports streaming venture involving ESPN, Fox, and Warner Bros. Discovery.
The Walt Disney Company announced its fiscal first-quarter earnings, surpassing expectations as it focused on cost reduction amidst stagnant revenue. With an increased guidance, Disney anticipates earnings per share for fiscal 2024 to rise by at least 20% compared to 2023, aiming to cut costs by $7.5 billion by fiscal year-end. The reported earnings per share of $1.22 adjusted exceeded Wall Street’s estimate of 99 cents, although revenue slightly fell short at $23.55 billion compared to the expected $23.64 billion. Despite a $138 million operating loss in the direct-to-consumer unit, losses across all streaming businesses narrowed to $216 million, largely due to Disney+’s subscriber decline of 1.3 million attributed to price hikes, yet offset by increased average revenue per user. Disney unveiled plans for a new sports streaming venture involving ESPN, Fox, and Warner Bros. Discovery, with potential pricing speculated around $45 or $50 per month. Amidst these financial updates, Disney faced renewed pressure from activist investor Nelson Peltz and Blackwells Capital, seeking board changes citing stock performance, earnings estimates, and studio content. CEO Bob Iger acknowledged theatrical release challenges, pledging a shift towards fresh, quality films, with notable releases expected by 2025-2026. Additionally, Disney’s adoption of a new financial reporting structure, dividing the company into entertainment, sports, and experiences divisions, signals its strategic reorganization and diversification efforts beyond traditional media operations.
For the full original article on CNBC, please click here: https://www.cnbc.com/2024/02/07/disney-dis-earnings-report-q1-2024.html
