Walt Disney Co. on Wednesday handily beat Wall Street’s profit estimates, boosted by record performance at its theme parks and continued cost-cutting efforts, even though sales fell short of analysts’ expectations.
Disney’s board of directors also approved a $3 billion stock repurchase program for the current fiscal year and will pay a dividend of 45 cents per share on July 25 to shareholders of record on July 8. declared.
This represents a 50% increase from the dividend paid in January.
The company reported earnings per share of $1.22, excluding certain items, beating analysts’ consensus estimate of 99 cents per share for the October-December period.
Shares rose more than 7% after hours to $106.70.
Quarterly sales fell short of expectations of $23.6 billion, compared to $23.5 billion a year earlier.
Disney said it cut costs by $500 million across its operations during the quarter and is on track to save more than $7.5 billion by the end of the current fiscal year.
The company is under pressure from activist investor Nelson Peltz, who is seeking Netflix-like profits from its streaming business, improved box office revenue for movies and details of its plans to make ESPN the dominant digital platform. There is.
On Tuesday, Fox, ESPN and Warner Bros. Discovery announced they would team up to leverage their vast sports assets to build a new streaming platform to take on Amazon and Apple.
“Exactly one year ago, we outlined an ambitious plan to return The Walt Disney Company to an era of sustained growth and shareholder value creation,” Disney CEO Bob Iger said in a statement. I did,” he said. “Our strong performance this quarter shows that we have turned a corner and entered a new era of growth.”
The company’s Experiences segment, which includes theme parks and consumer products, posted record revenue, operating profit and operating margin.
Disney has reaffirmed its expectation that its streaming business will reach profitability by September.
Streaming operating losses for the quarter fell to $138 million, a dramatic improvement from a year ago when the company lost nearly $1 billion.
Average monthly income per Disney+ user outside India increased by 14 cents.
Streaming service Disney+ lost 1.3 million subscribers after raising prices in October, nearly double the loss of 700,000 that analysts expected.
The company expected strong revenue per user in the second quarter, with an increase of 5.5 million to 6 million Disney+ subscribers.
The entertainment division’s streaming business, which also includes India’s Hulu and Disney+ Hotstar, posted revenue of $5.5 billion, slightly above expectations and an improvement of 15% year over year.
Overall revenue from Disney’s entertainment division, which includes traditional television, streaming and movies, fell 7% from a year ago to $9.98 billion.
This result was depressed by lower ABC advertising revenues and lower rates due to the continued loss of cable subscribers, partially offset by reduced programming costs related to the Hollywood strike.
Compared to the strong performance of “Black Panther: Wakanda Forever” and “Avatar: The Way of Water” a year ago, “The Marvels” and “Wish” performed poorly at the box office, and content sales declined. and licensing fell into the red.
Disney’s sports division, which includes streaming services ESPN+ and Star in India, had revenue of $4.8 billion, up 4% year-on-year, but the operating loss was 103 million as Star in India’s deficit widened. It reported a loss of USD.
Theme park performance was strong with the opening of the World of Frozen attraction at Hong Kong Disneyland and Zootopia at Shanghai Disney Resort.
Increased attendance at these parks helped offset declines at Walt Disney World in Orlando, Florida.
The division reported sales of $9.1 billion and operating income of $3.1 billion.
