Earnings rose to $1.22 a share, excluding certain items, Disney said Wednesday in a statement. That beat the 99-cent average of Wall Street estimates.
Revenue was little changed at $23.5 billion in the period ended Dec. 30 and missed the $23.8 billion average of estimates compiled by Bloomberg, held back by Disney’s struggling TV business and two theatrical misfires, The Incredibles and Desire.
Thanks to cost-cutting, Disney said profit this year would rise at least 20% to about $4.60 a share, beating estimates of $4.27. That could help CEO Bob Iger fend off activist investor Trian Fund Management LP, which has appointed its founder Nelson Peltz and former Disney financier Jay Rasulo to the entertainment giant’s board.
In a nod to investors, Burbank, California-based Disney raised its dividend by 50% to 45 cents a share and approved a $3 billion share buyback program for the year.
Disney shares gained as much as 8.7% to $107.75 in extended trading after the results were announced, their highest in nearly a year. The company also announced that it is acquiring 1.5 billion dollars in Epic Games Inc. as part of a collaboration with the company that makes the popular title Fornite.
Read More: Disney Invests $1.5 Billion in Fortnite Maker Epic Games
Subscribers to the Disney streaming service fell to 149.6 million in the quarter, missing analysts’ projections of 151.2 million, while overall losses in streaming, including Hulu and ESPN, shrank to $216 million from $1.05 billion a year ago.
However, the company expects to add up to 6 million core Disney subscribers this period and continues to predict that its streaming operation will reach profitability by the fourth quarter of the current fiscal year.
The bright spot for Disney last quarter was its international parks, where profit more than quadrupled and sales were up 35% from last year, when Covid closures were still in place. That more than offset a more modest 4% gain in revenue at its domestic resorts and a 2% drop in profit, with attendance declining at Walt Disney World in Florida.
Disney’s international parks also benefited from a new Frozen attraction in Hong Kong and Zootopia in Shanghai.
The company’s traditional media businesses continued to struggle, hurt by an accelerating decline in its broadcast and cable TV business – led by ABC – and continued losses at the division that includes the film studio. The film division has posted quarterly losses for most of the past two years.
Revenue from content sales and licensing – including the movie studio – fell 38% from a year earlier, while sales at Disney’s home TV networks fell 14% last quarter, worsened by strikes that halted production in Hollywood.
On Tuesday, Disney announced plans to bundle ESPN content with Fox Corp. programming. and Warner Bros. Discovery Inc. to create a new sports-focused streaming service.
Before that announcement, Trian’s plans for Disney included combining ESPN’s streaming business with a bigger player like Netflix Inc., Bloomberg reported. Trian stopped an effort to seek Disney board seats last year, but renewed his efforts ahead of this year’s annual meeting.
“We saw this movie last year and we didn’t like the ending,” Trian said in a statement.
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This story was published by a wire agency feed without modifications to the text. Only the title was changed.
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Published: 08 Feb 2024, 06:37 IST