Disney DIS posted better-than-expected fourth earnings Wednesday, while adding a solid number of new subscribers to its core streaming division as it forecast 'significant' free cash flow growth for the coming fiscal year.
Disney said adjusted earnings for the three months ended in September the group's fiscal fourth quarter, came in at 82 cents per share, up form the 30 cents per share recorded last year and firmly ahead of the Street consensus forecast of 70 cents per share.
Group revenue, Disney said, rose 5.4% to $21.24 billion, narrowly missing the Wall Street consensus forecast of a $21.35 billion tally.
“Our results this quarter reflect the significant progress we’ve made over the past year. While we still have work to do, these efforts have allowed us to move beyond this period of fixing and begin building our businesses again," said CEO Bob Iger.
"We have a solid foundation of creative excellence and innovation built over the past century, which has only been reinforced by the important restructuring and cost efficiency work we’ve done this year, and we’re on track to achieve roughly $7.5 billion in cost reductions," he added. "Combined with our portfolio of valuable businesses, brands and assets – and the way we manage them together – Disney has a strong hand that differentiates us from others in our industry."
Disney shares were marked 3.25% higher in after-hours trading immediately following the earnings release to indicate a Thursday opening bell price of $87.25 each.
Disney's reporting was condensed into three new reporting segments in today's earnings report, with ESPN will sit largely in a stand-alone Sports division for the first time in the company's history.
Sports-focused profits were up 14% from the same period last year to $981 million, topping Street forecasts of around $862 million.
Experiences profits were up 31% from last year to $1.8 billion, topping Street forecasts, thanks to solid gains from international theme parks such as Hong Kong. while Entertainment division profits was pegged at $236 million, compared to a loss of $608 million last year.
Overall Disney+ paid subscribers rose by 7 million from the previous quarter, the company said, doubling Street forecasts, while Hotstar subs fell by around 4 million to 37.6 million, putting the overall total at 150.2 millon.
Streaming-division losses were pegged at $387 million, down from around $1.5 billion last year and the $512 million loss pegged over the previous quarter.
Disney also said it would accelerate its cost-cutting program by around $2 billion, taking it to $7.5 billion per year, while saying it expects to "grow free cash flow in fiscal 2024 significantly versus fiscal 2023, approaching levels last seen pre-pandemic."
- Action Alerts PLUS offers expert portfolio guidance to help you make informed investing decisions. Sign up now.
