The Walt Disney Company reported an improvement in last quarter’s performance with higher revenue and nearly tripled net income.
The company reportedly cut its losses on streaming service Disney+ by raising prices. However, Disney+ lost 4 million global subscribers to 157.8 million from last quarter, mainly due to cancellations in India.
Disney stock fell 5% in long-term trading.
The entertainment giant posted a 13% increase in revenue in the second quarter compared to the same period last year to approximately $21.82 billion, beating Refinitiv analysts’ forecast of $21.79 billion.
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Diluted earnings per share, excluding certain items, reached $0.93, in line with analyst expectations.
The Disney Media and Entertainment Distribution (DMED) segment contributed to the company’s total quarterly revenues of $14.04 billion, up 3%.
Under the DMED segment, Disney reported a quarterly operating loss for direct-to-consumer services of $659 million, about 26% less than it posted in the same period last year. The improved performance was partially offset by a decline in Hulu’s operating profit.”
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Overall, the company’s streaming services have more than 231.3 million total subscribers. By comparison, in the first quarter he had 234.7 million and in the second quarter of 2022 he had 205.6 million.
In his opening remarks on the earnings call, CEO Bob Iger emphasized that streaming operating losses had narrowed, adding that he was “very optimistic” about Disney’s “long-term” direct-to-consumer business.
One step for Disney to “create a growth business” in streaming is “to immediately begin offering a one-app experience in the country that incorporates Hulu content via Disney+.” said Eiger.
He said the ad-free Disney+ subscription option will see a price increase in the second half of 2023 “to better reflect the value of the content we offer.”
Linear Networks, which had revenues of $6.63 billion and operating income of $1.83 billion in the second quarter, was also included in DMED in the earnings report.
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Meanwhile, about $7.78 billion of Disney’s revenue comes from its Parks, Experiences and Products segments. In 2022, the company posted $6.65 billion in the same three-month period he did. So year-over-year he increased by 17%.
Iger told analysts and investors that Disney “is likely to meet or exceed” the $5.5 billion it is aiming to cut as part of a major restructuring.
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“From movies to television to sports to news to theme parks, we continue to serve our consumers while establishing a more efficient, coordinated and streamlined approach to operations.” Iger was quoted as saying in an earnings release.