Walt Disney handily beat Wall Street’s earnings expectations on Wednesday, lifted by record results at its theme parks and continued cost-cutting efforts, whilst revenue fell shy of analysts’ estimates.
Disney’s board of directors also authorized a $3 billion share repurchase program for the present fiscal 12 months, and declared a dividend of 45 cents a share, payable on July 25 to shareholders of record on July 8.
That represents a 50% increase from the dividend paid in January.
The corporate posted earnings of $1.22 per share, excluding certain items, ahead of analysts’ consensus forecast of 99 cents per share for October through December.
Shares rose greater than 7% after hours to $106.70.
Quarterly revenue was comparable to a 12 months ago, at $23.5 billion, but wanting projections of $23.6 billion.
Disney said it cut $500 million in costs across its business throughout the quarter, and that it stays on course to fulfill or exceed $7.5 billion in savings by the tip of the present fiscal 12 months.
The corporate is under pressure from activist investor Nelson Peltz, who’s searching for Netflix-like profit for its streaming business, higher performance of its movies on the box office, and more details about its plans to make ESPN a dominant digital platform.
On Tuesday, Fox, ESPN and Warner Bros. Discovery said they were joining forces to create a recent streaming platform using their vast sports assets to compete with Amazon and Apple.
“Only one 12 months ago, we outlined an ambitious plan to return the Walt Disney Company to a period of sustained growth and shareholder value creation,” Disney CEO Bob Iger said in a press release. “Our strong performance this past quarter demonstrates we have now turned the corner and entered a recent era of growth for our company.”
The corporate’s Experiences unit, which incorporates its theme parks and consumer products, posted record revenue, operating income and operating margins.
Disney reaffirmed guidance that its streaming business would reach profitability by September.
It reduced streaming operating losses to $138 million within the quarter, a dramatic improvement over a 12 months ago, when it lost nearly $1 billion.
The typical monthly revenue per Disney+ user, outside of India, rose 14 cents.
The Disney+ streaming service shed 1.3 million subscribers, nearly double the lack of 700,000 that analysts forecast, after an October price increase.
The corporate forecast it could gain 5.5 million to six million Disney+ subscribers in its second quarter, with positive momentum in per-user revenue.
The Entertainment unit’s streaming business, which also includes Hulu and Disney+ Hotstar in India, reported revenue of $5.5 billion, just above forecasts, and marking a 15% improvement from a 12 months ago.
Overall revenue for the Entertainment segment, which encompasses Disney’s traditional TV business, streaming and film, dropped 7% from a 12 months earlier to $9.98 billion.
The outcomes were dragged down by lower ad revenue at ABC and lower fees from the continued losses of cable subscribers, partially offset by reduced programming costs related to the Hollywood strikes.
The weak box office performance of “The Marvels” and “Wish,” compared with the strong results a 12 months ago from “Black Panther: Wakanda Eternally” and “Avatar: The Way of Water,” dragged content sales and licensing to a loss.
Disney’s sports division, which incorporates ESPN, the ESPN+ streaming service and Star in India, reported revenue of $4.8 billion, a gain of 4% from a 12 months ago, but an operating lack of $103 million attributable to a deepening loss at Star in India.
Theme park results were buoyed by the opening of the World of Frozen attraction at Hong Kong Disneyland and Zootopia at Shanghai Disney Resort.
Higher attendance at those parks helped offset a drop at Walt Disney World in Orlando, Florida.
The unit reported revenue of $9.1 billion and operating income of $3.1 billion.