Disney (DIS) reported quarterly results after the bell rang on Wednesday that showed earnings per share missed estimates by a penny while streaming losses narrowed as the company continues efforts to cut costs by 5. $5 billion cut.
The report was the first since Disney announced its new three-pronged business restructuring – Disney Entertainment, ESPN and Disney Parks, Experiences and Products – as CEO Bob Iger seeks to streamline the media giant and realign its strategy. The company will begin reporting in the new structure later this year.
Theme parks continued to be strong outperformers with operating income of $2.17 billion for the quarter, mirroring recent trends at competitors such as Comcast’s Universal (CMCSA).
Though Disney+ subscribers fell short of expectations, streaming losses narrowed to $659 million in the second quarter — above consensus estimates of $850 million — from a loss of $887 million in the year-ago period. The company reported a $1.1 billion streaming loss in the first quarter and a $1.5 billion loss in the fourth quarter.
“We are pleased with our achievements this quarter, including the improved financial performance of our streaming business, which reflects the strategic changes we have made across the business to position Disney for sustained growth and success,” Iger said in the earnings release . “From movies to television to sports, news and our theme parks, we continue to serve consumers while evolving a more efficient, coordinated and streamlined approach to our operations.”
Immediately following the release, the stock fell, with shares falling 2% in after-hours trading
Here are Disney’s second-quarter results compared to Wall Street consensus estimates compiled by Bloomberg:
Revenue: $21.82 billion versus $21.82 billion expected
Adj. earnings per share (EPS): $0.93 vs. $0.94 expected
Total Disney+ subscribers: 157.8 million versus 163.1 million expected
Revenue from Disney Parks, Experiences and Products: $7.78 billion versus $7.67 billion expected
The story goes on
Iger, who stepped down as CEO in November, remained heavily focused on profitability as investors turned away from subscriber growth and placed more emphasis on margins. The company’s direct-to-consumer division, which includes Disney+, Hulu and ESPN+, lost a whopping over $4 billion in fiscal 2022, which ended Oct. 1, after losing an estimated $33 billion last year -Spent dollars on content.
Since then, Iger has worked hard to generate new revenue streams like Disney’s recently launched ad-supported tier, and has also made various price increases to help stem losses.
FILE – Bob Iger speaks at the Bloomberg Global Business Forum on September 25, 2019 in New York. Since Iger returned to The Walt Disney Co., there have been many issues on his mind. One thing he was particularly passionate about was reconnecting with die-hard Disney theme park fans and restoring their trust in the brand. (AP Photo/Mark Lennihan, file)
Iger has consistently reiterated the company’s prospect of achieving streaming profitability by 2024, although the road will still be bumpy.
Coupled with profitability concerns, Hulu’s future is at stake after Bob Iger said “everything is on the table” regarding the company’s stake in the streamer. Investors will closely monitor any further earnings announcement comments regarding the future of Hulu and Iger’s overall streaming vision.
Advertising continued to cause headwinds, too, similar to the competition. Linear network revenue declined 7% in the quarter compared to the year-ago period.
On the park side of the business, operating income beat expectations of $2.14 billion and reached $2.17 billion, up from $1.76 billion in the second quarter of 2022.
Parks rose to $3.05 billion in the first quarter on strong domestic theme park trends. Despite heightened risks to margins amid inflation, analysts remain broadly bullish on the parking business.
Earlier this year, Disney announced long-awaited updates to its park reservation system and annual pass program after consumer backlash over long wait times and sky-high ticket prices.
Alexandra Canal is a Senior Reporter at Yahoo Finance. Follow her on Twitter @alliecanal8193 and email her at [email protected]
Click here for the latest stock market news and in-depth analysis, including stock moving events
Read the latest financial and business news from Yahoo Finance