[ad_1]
Walt Disney and Co. (DIS) misplaced about 12 million Disney+ streaming subscribers, took a giant hit resulting from restructuring prices, and missed income projections, however its third-quarter earnings per share beat analysts’ expectations.
Key Takeaways
- Disney reported earnings per share (EPS) of $1.03 per share, topping expectations of 95 cents a share.
- Income was 4% increased on the yr, however the firm misplaced about 12M streaming subscribers.
- Some analysts nonetheless see an Apple takeover of Disney sooner or later.
Disney’s reported a internet lack of $460 million or 25 cents a share for the quarter, in comparison with a $1.4 billion revenue, or 77 cents per share, for a similar interval final yr, primarily pushed by a $2.65 billion restructuring and impairment cost.
Diluted earnings per share (EPS), excluding sure objects, have been increased than anticipated at $1.03 versus 95 cents per share forecasts. Income of $22.33 billion was up 4% on the yr however decrease than analysts’ expectations for $22.5 billion.
Income was pushed by a 13% acquire within the firm’s parks, experiences, and merchandise section, with a 1% drop in media and leisure distribution year-over-year. The corporate posted an working loss (OL) of $134 million, pushed by a $512 million loss within the direct-to-consumer streaming section however narrowed from $1.06 billion a yr in the past.
Disney’s Subscriber Attrition Is A Drawback
As of July 1, 2023, Disney+ and Disney+Hotstar had 146.1 million subscribers, down 7.4% from the earlier quarter and roughly 4% decrease than the year-ago quarter.
Disney+ Hotstar disillusioned analysts with a pointy drop in subscribers during the last yr of 12.5 million, or 24%, with subscriber attrition primarily pushed by the lack of rights to broadcast a cricket event—the Indian Premier League.
Whereas it has didn’t stem the outflow of subscribers, Disney is making an attempt to spice up subscription revenues and offset a few of its content material prices via increased subscription pricing. On Wednesday, it introduced an nearly 27% hike within the month-to-month price of its ads-free Disney+ plan to $13.99 per 30 days.
Iger’s Plan For Disney Revival On Observe However At A Value
CEO Bob Iger, who simply had his contract prolonged to 2026, stated the transformation happening on the firm has it “on observe to exceed our preliminary aim of $5.5 billion in financial savings,” whereas enhancing direct-to-consumer working revenue “by roughly $1 billion in simply three quarters.”
However that restructuring got here at a value this previous quarter when Disney accrued $2.65 billion in restructuring and impairment costs—$2.44 billion in costs pertaining to eradicating sure content material from its streaming platform and one other $210 million in severance. That was an enormous bounce from impairment costs of solely $42 million within the earlier quarter associated to its operations in Russia.
Disney’s AI Guess And Potential Strategic Investments
A brand new initiative has been to arrange a synthetic intelligence process drive to discover how it may be utilized throughout the corporate’s enterprise segments, Reuters reported this week. There was additionally an announcement late Wednesday that sports activities betting firm Penn Leisure (PENN) would rebrand its enterprise to ESPN Guess in a $2 billion partnership deal.
In the meantime, some analysts proceed to push the concept Disney might be purchased out by Apple (AAPL). Needham & Co.’s Laura Martin stated that Disney “can be bought in the course of the subsequent three years,” noting a possible takeover premium within the 30 to 40 p.c vary, The Road reported. She additionally cited a possible strategic match with Apple’s upcoming Imaginative and prescient Professional headset, which Iger helped promote not too long ago, based on Hollywood Reporter.
[ad_2]
Source link