Fueled by the success of its theme parks, The Walt Disney Company posted earnings of US$23.510 billion, despite losing 2.4 million Disney+ subscribers
In its earnings report for the first quarter of fiscal 2023, the recently returned CEO of The Walt Disney Company, Bob Iger, sought to reassure investors that the company has a solid plan that includes a “significant transformation” for maximizing the creative potential of the brand.
During the period -which corresponds to the last three months of 2022-, Disney presented earnings of USD 23.510 billion, an increase of 8% compared to the previous period, which exceeded the best estimates of Wall Street, which placed those earnings in US$ 23.370 billion.
The key was in the success of the theme parks, fully recovered after the pandemic, which managed to combat some weaknesses in the report, such as the loss of 2.4 million subscribers suffered by Disney+, in what is the first negative quarter of the platform since its launch.
Much of Disney+’s trouble was caused by its version in India and Southeast Asia, known as Disney+ Hotstar, which was very sorry to have lost the rights to the Indian Premier League, the region’s top cricket league.
In other regions, on the other hand, Disney+ continued to grow, as did Hulu and ESPN+.
Theme parks, on the other hand, exploded: profits grew by 21% to reach 8.7 billion dollars. As reported by the company, visitors stayed longer and spent more money during the quarter in its parks, hotels and cruises offer, as well as in digital products such as Genie+ and Lightning Lane.
“After a strong first quarter, we are embarking on a significant transformation, which will maximize the potential of our world-class creative teams and our unparalleled brands and franchises,” said Iger.
“We believe that the work we are doing to reshape our company around creativity, while reducing expenses, will lead to sustained growth and profitability for our broadcast business, better position us to face future global economic disruptions and challenges, and deliver value. to our shareholders”, stressed the executive.
The company announced that it will reduce its operating cost by 5,500 million dollars, which will mean a reduction in its workforce of around 7,000 employees.
The restructuring will leave The Walt Disney Company with three major divisions: Disney Entertainment, in charge of streaming and media operations; ESPN, focused on the TV network and the ESPN+ platform; and the Parks, Experiences and Products unit.
Iger’s message had the desired impact, with the company’s shares rising 3% after his words were made public.
Continuing with Disney+ plans, the company said its experiences with the ad-supported version of the platform have been positive, but its impact on earnings won’t be felt until later this year.
Linear TV, for its part, saw earnings fall by 5%, to 7.3 billion dollars. The earnings of domestic channels fell 1%, partly due to the poor performance of ABC.
Internationally, the company’s channels saw their profits fall by 21%, to close the quarter at 1.2 billion.
In the movies, executives highlighted the big screen success of Black Panther: Wakanda Forever.
As Disney had announced, the direct-to-consumer business presented operating losses of 1.05 billion dollars, which in any case were less than those predicted by Wall Street.