The Walt Disney Co., having restructured its operations, is now moving on to its next phase under CEO Bob Iger’s second turn leading the entertainment giant.
Iger, of course, re-joined the company a year ago with a mandate to “set a new strategic direction” for the company. In commentary tied to Disney’s latest quarterly earnings report (its fiscal fourth-quarter), Iger suggested that the company’s future effectively begins now.
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“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,” Iger said in a statement. “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. 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.”
The $7.5 billion figure is a $2 billion increase from the previously-planned $5.5 billion number.
Disney reported revenue of $21.2 billion in the quarter, narrowly missing the street estimates but up slightly from last year. Operating income was $2.9 billion with diluted earnings per share of $0.82, beating the street estimates.
In streaming, the company added 7 million core Disney+ subscribers (excluding Star), with the direct-to-consumer streaming businesses continuing to lose money. In its last quarter Disney’s streaming businesses lost a combined $387 million across entertainment and sports, but the company now has more than 150 million Disney+ subscribers.
Hulu subscribers were essentially flat from last year. ARPU at Disney+ was up slightly thanks to increased ad revenue, while ARPU at Hulu declined slightly due to lower advertising revenue.
The company’s new financial reporting structure is built around three operating areas: Entertainment, sports, and experiences, with the biggest change being ESPN’s finances being broken out from the rest of the company’s linear and streaming offerings.
In entertainment, revenues were $9.5 billion, with direct-to-consumer making up more than $5 billion of that number. Income was $236 million, with all the profits from linear offsetting the losses in streaming.
In sports, ESPN saw its revenue rise slightly to $3.8 billion, with operating income rising 16% to $987 million.
In parks and experiences, revenue rose by 13% to $8.2 billion, with operating income rising by 31% to $1.8 billion,
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