Walt Disney Co (NYSE: DIS) reported better-than-anticipated better than anticipated fiscal 2023 first quarter results. Furthermore, the media and entertainment company also recorded a lower-than-expected decline in paid subscribers. The company also revealed its plan to cut jobs as a portion of its restructuring plan. The stock ended Thursday’s trading session at $110.36, a decrease of $1.42 or 1.27% from its prior close.
Burbank, California-based Walt Disney reported first-quarter revenues of $23.51 billion, an increase of 8% from $21.82 billion in the comparable quarter last year.
For the quarter that ended December 31, 2022, Disney reported a net income of $1.28 billion, or $0.70 per share, compared with a net income of $1.10 billion, or $0.60 per share, in the quarter that ended January 1, 2022.
Excluding amortization of TFCF and Hulu intangible assets and fair value step-up on film and television costs, restructuring and impairment charges, and other expenses, net, the 1Q 2023 non-GAAP income was $1.89 billion, or $0.99 per share, an increase from $1.99 billion, or $1.06 per share, in the 1Q 2022.
Analysts surveyed by Refinitiv had anticipated Walt Disney to post earnings of $0.78 per share on revenues of $23.37 billion.
Commenting on the results, Robert Iger, CEO, of The Walt Disney Company, stated, “After a solid first quarter, we are embarking on a significant transformation, one that will maximize the potential of our world-class creative teams and our unparalleled brands and franchises.”
Segment wise:
- Disney Media and Entertainment Distribution revenues were $14.78 billion, up 1% from last year.
- Linear network revenues fell by 5%y-o-y to $7.29 billion.
- Direct-to-Consumer revenues were $5.31 billion, up 13% from last year.
- Content sales/licensing revenues were $2.46 billion, almost flat from the previous year.
- Disney Parks, Experiences and Products revenues surged 21%y-o-y to $8.74 billion.
- Domestic Parks & Experiences revenues jumped 27% y-o-y to $6.07 billion.
- International Parks & Experiences revenues were $1.09 billion, an increase of 27% from the previous year.
- Consumer products revenues stood flat at $1.57 billion.
The company’s streaming services division announced a subscription rate hike in the first quarter. This led to a loss of about 2.40 million subscribers in the Disney+ division. However, it was still lower than StreetAccount analysts’ forecast of a loss of 3 million subscribers.
At the end of the first quarter, the company had 161.80 million subscribers, versus the 161.10 million forecast by StreetAccount.
During the earnings call, the company’s CEO, Bob Iger, revealed Walt Disney’s intention to slash 7,000 jobs as a part of the restructuring process. The CEO expects to save $5.50 billion in costs as an outcome of the restructuring plan.
The quarterly earnings beat is expected to keep the stock of Walt Disney slightly bullish in the short term.
The historical price chart indicates that the stock of Walt Disney is ascending after testing the support level of 110. The next resistance is anticipated only near 122. Additionally, the stock is trading above its 50-day moving average, while the Chaikin Money Flow indicator is showing a positive reading. Therefore, we anticipate the share price of Walt Disney to remain in an uptrend in the near term.
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