Not only did Disney slash streaming losses by $400 million from the previous quarter, but it also cut subscribers, it said Wednesday.
Disney shares fell 2.4% to $98.75 in after-hours trading.
The company plans to expand its streaming service with a new app that combines Disney+ and Hulu by the end of the year, said CEO Bob Iger.
The new app will streamline the viewing experience for users and provide more opportunities for advertisers, Iger said.
Price increases and lower marketing costs helped improve streaming unit performance, posting an operating loss of $659 million for the January-March quarter.
Last quarter, the division lost $1.1 billion.
Overall, diluted earnings per share were 93 cents, meeting the consensus forecast of analysts surveyed by Refinitiv.
Revenue reached $21.82 billion, slightly above analyst expectations of $21.79 billion.
The company’s theme parks continued to thrive with visitors, contributing to operating income of $2.2 billion, up 23% year-on-year, driven by growth at Shanghai Disney Resort, Disneyland Paris, and Hong Kong Disneyland Resort.
“We are pleased with our performance this quarter, including the improved financial performance of our streaming business,” Iger said in a statement. reflects a strategic change.
Total subscribers to the flagship Disney+ service decreased by 4 million from the previous quarter to 157.8 million.
Most of the withdrawals came from Disney+ Hotstar, which is being offered in India after losing streaming rights to Indian Premier League cricket matches.
Disney also cut 300,000 customers in the U.S. and Canada after raising prices last December.
Chief Financial Officer Christine McCarthy warned in February that she expected “moderately high” cancellations due to higher prices.
Wall Street has put pressure on media companies to profit from the billions they have poured into streaming in recent years to compete with Netflix.
Iger, who left in November to tackle the company’s agenda, announced reforms in February that included a promise to cut costs by $5.5 billion by cutting 7,000 jobs.
As Disney tries to build streaming, the traditional TV business faces obstacles.
Linear Networks operating income decreased 35% from the year-ago quarter to $1.8 billion. This was due to higher sports programming and production costs related to the college football playoffs and the NFL on ESPN and lower advertising revenues on ABC and its owned TV stations.
