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Disney reports sharp profit growth in the fourth quarter and an expansion of its cost-cutting drive

FILE - In this Nov. 13, 2019, photo, a Disney logo forms part of a menu for the Disney Plus movie and entertainment streaming service on a computer screen in Walpole, Mass. Disney reports earnings on Wednesday, Nov. 8, 2023. (AP Photo/Steven Senne, File)

SAN FRANCISCO (AP) — Walt Disney Co. on Wednesday reported sharp profit growth for its fiscal fourth quarter while announcing an expansion of its cost-cutting drive under returning CEO Bob Iger.

The results topped Wall Street expectations and sent shares in the entertainment and theme park company up more than 3% in after-hours trading.

Disney said its net income jumped 63% to $264 million in the quarter that ended Sept. 30, up from $162 million a year earlier. Its adjusted earnings per share, excluding items largely related to the amortization of Disney's acquisitions of 21st Century Fox's entertainment assets and Hulu, more than doubled to 82 cents in the quarter. Industry analysts had been expecting 71 cents a share, according to FactSet.

Revenue for the quarter rose 5% to $21.24 billion, up from $20.15 billion. The company credited cost-cutting and other efficiencies from restructuring as well as continued subscription growth in its streaming business. It also noted a 30% increase in operating income from its parks and similar “experiences” compared to the prior year.

Iger returned as CEO a year ago following a challenging two-year tenure by his handpicked successor, Bob Chapek. He soon announced a “strategic reorganization” and cost-cutting drive that has included thousands of layoffs.

In a call with analysts Wednesday, Iger said the company's focus on cost-cutting has “enabled tremendous efficiency” and the company based in Burbank, California, is on track to reduce expenses by $7.5 billion, about $2 billion more than earlier targeted.

On the streaming front, Iger said the company added nearly 7 million core Disney+ subscribers in the quarter. But he noted that Disney is also looking for ways to begin delivering more sports events via ESPN's streaming platform. Iger referred specifically to Disney's plan to bring ESPN “direct to consumer, which is inevitable, which is going to happen,” he said. “We're planning for it.”

One possibility, Iger said, would be to keep ESPN+ as part of the traditional cable bundle, but then to make additional viewing available as a la carte options. Without going into details, he alluded to the possibility of future ESPN partnerships with sports leagues that could provide ESPN with more “content.” Given continued decreases in cable subscribers, he said, “this is a way to really buck that trend.”