While the company’s linear TV and direct-to-consumer units struggled during the period, its theme parks saw significant growth year-over-year.
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Shares of the company were up 5% after the bell.
Here are the results, compared with estimates from Refinitiv and StreetAccount:
- Earnings per share: 99 cents per share, adj. vs 78 cents per share expected, according to a Refinitiv survey of analysts
- Revenue: $23.51 billion vs $23.37 billion expected, according to Refinitiv
- Disney+ total subscriptions: 161.8 million vs 161.1 million expected, according to StreetAccount
With CEO Bob Iger back at the helm, Disney is seeking to make a “significant transformation” of its business by reducing expenses and putting the creative power back in the hands of its content creators.
“We believe the work we are doing to reshape our company around creativity, while reducing expenses, will lead to sustained growth and profitability for our streaming business, better position us to weather future disruption and global economic challenges, and deliver value for our shareholders,” Iger said in a statement ahead of the company’s earnings call.
During the call Iger announced that the media and entertainment giant would reorganize, cut thousands of jobs and slash $5.5 billion in costs. The company will now be made up of three divisions:
- Disney Entertainment, which includes most of its streaming and media operations
- An ESPN division that includes the TV network and ESPN+
- A Parks, Experiences and Products unit
Iger’s return comes as legacy media companies contend with a rapidly shifting landscape, as ad dollars dry up and consumers increasingly cut off their cable subscriptions in favor of streaming. Even the streaming space has been difficult to navigate in recent quarters, as expenses have swelled and consumers become more cost conscious about their media spending.
A recent price hike for Disney’s streaming services likely led to the loss of around 2.4 million Disney+ subscribers during the quarter. The company had been expected to lose more than 3 million, according to StreetAccount.
The company said Wednesday that it will no longer provide long-term subscriber guidance in an effort to “move beyond the emphasis on short-term quarterly metrics,” Iger said on the call. Netflix made a similar decision late last year.
Additionally, as was forecast by Disney in previous quarters, its direct-to-consumer business has once again posted an operating loss. In the most recent quarter, the operating loss was $1.05 billion, narrower than the $1.2 billion Wall Street had predicted.
Net income was $1.28 billion, or 70 cents a share, compared with $1.1 billion, or 60 cents a share, a year ago. Revenue rose 8% to $23.51 billion from $21.82 billion a year ago.
A bright spot for Disney came from its parks, experiences and products divisions, which saw a 21% increase in revenue to $8.7 billion during the most recent quarter.
A little more than $6 billion of that revenue came from its theme park locations. The company said guests spent more time and money during the quarter visiting its parks, hotels and cruises as well as on additive digital products like Genie+ and Lightning Lane.
Additionally, Iger said the company will ask its board to approve the reinstatement of its dividend by the end of the calendar year. Disney suspended its dividends in early 2020 due to the pandemic.
“Our cost-cutting initiatives will make this possible, and while initially it will be a modest dividend, we hope to build upon it over time,” Iger said.
Tune in to CNBC at 9 a.m. ET Thursday for an exclusive interview with Disney CEO Bob Iger.