Amid a spat with DeSantis, Disney posts higher second-quarter revenue
Disney is in the midst of eliminating about 7,000 jobs as part of a targeted $5.5 billion cost savings across the company.
Ongoing strength at its theme parks and an improving streaming business propelled The Walt Disney Co. to higher profits and revenue in its fiscal second quarter.
But the company lost 4 million streaming subscribers to its Disney+ service and its shares fell 4.5% in after-hours trading.
The entertainment giant, which is in the midst of a “ strategic reorganization,” has been working on trimming about 7,000 jobs as part of a targeted $5.5 billion cost savings across the company.
Bob Iger, who returned in November to take over the CEO post from Bob Chapek, has been working over the past six months to turn around Disney's streaming business while simultaneously making sure that the financial might coming from its theme parks doesn't waver.
He's also had to contend with trying to protect Disney World’s theme park district from a takeover by Florida Governor Ron DeSantis. Disney sued DeSantis in late April, alleging the governor waged a “targeted campaign of government retaliation” after the company opposed a law critics call “ Don’t Say Gay.” Disney’s legal filing is the latest salvo in a more than year-old feud between the company and DeSantis.
"We’re pleased with our accomplishments this quarter, including the improved financial performance of our streaming business, which reflect the strategic changes we’ve been making throughout the company to realign Disney for sustained growth and success,” Iger said in a statement.
For the three months ended April 1, Disney earned $1.27 billion or 69 cents per share. That compares with $470 million, or 26 cents per share, a year ago.
After adjusting for one-time items, Disney earned 93 cents per share, matching analysts' expectations according to a poll by FactSet.
Revenue rose 13% to $21.82 billion. This also met Wall Street's forecast of $21.8 billion.
Sales at its parks, experiences and products segment rose 17% in the quarter. Revenue for the segment that includes Disney’s movie business climbed 3%.
In Disney's fiscal first quarter, sales at its parks, experiences and products division grew 21%, while revenue for the unit housing its movie business inched up 1%.
The company lost 4 million subscribers at its Disney+ streaming service, ending the second quarter with 157.8 million paying subscribers.
Hulu subscribers were just about flat at 48.2 million. Disney said it plans to combine the two services into one app. The decline was largely due to losses at Disney+ Hotstar, which is the company's streaming service brand in India and some other Southeast Asian countries.
Disney's theme parks are widely viewed by industry experts as a critical component of the Burbank, California-based company's business. To that end, Iger has prioritized reconnecting with the Disney theme park die-hards and restoring their faith in the brand.
Shortly after Iger’s return, changes were rolling out at U.S. parks. And on Monday Disney announced that some big updates are in store for Walt Disney World next year, including the return of Disney dining plans and offering some days that annual passholders and Disney cast members can visit Walt Disney World theme parks without needing a park reservation.
Disney's stock fell $4.69, or 4.6%, to $96.45 in after-hours trading.
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