As Disney reported better-than-expected financials for its fiscal first quarter, CEO Bob Iger said the company is “undergoing a significant transformation” that will reshape the organization he rejoined last November.
The company showed improvement across various financial categories in the quarter ended Dec. 31, compared with a disappointing showing last November, just before Iger’s successor, Bob Chapek, was ousted. Revenue rose 8% to $23.5 billion from the year-ago period and earnings per share, excluding certain items, hit 99 cents. Both revenue and profit lines beat Wall Street analysts’ expectations.
Theme parks, which have bounced back after a tough fight with Covid, drove the quarterly performance. Revenue and operating income rose 21% and 25% in the Parks, Experiences and Products segments, respectively.
Operating losses in direct-to-consumer streaming narrowed to $1.1 billion from $1.5 billion, ahead of the company’s forecast of a $200 million decline. Along with Disney+Hotstar, Disney+ had its first negative quarter since launching in November 2019, falling 2.4 million subscribers to 161.8 million. The loss of some international Premier League cricket rights led to a drop in customers, the company said.
Excluding the Hotstar bundle, Disney+ gained 1.4 million subscribers in the previous quarter, to 104.3 million, a stronger showing than executives projected. Hulu, counting both its on-demand offerings and pay-TV bundles, hit 48 million subscribers, while ESPN+’s nearly 600,000 subscribers reached 24.9 million.
“After a difficult first quarter, we are embarking on a significant transformation, which will maximize
Our world-class creative team and our unmatched brand and franchise potential,” Iger said in the highly anticipated earnings release. “We believe the work we’re doing is reshaping our company around
Creativity, along with cost reduction, will drive sustainable growth and profitability for our streaming business, better position us to face future disruptions and global economic challenges, and deliver value for our shareholders.”
In the media and entertainment distribution unit, Linear Networks’ revenue fell 5% to about $7.3 billion, while operating income fell 16% to $1.3 billion. International channel revenue fell 21% to $1.2 billion and operating income fell 64% to $131 million. The culprits were lower advertising revenue, an unfavorable foreign exchange impact and declining affiliate revenue. Due to Covid-19 the timing of some sports broadcasts was also negatively affected.