The Walt Disney Co (NYSE: DIS) reported mixed fiscal 2023 fourth-quarter results. While earnings exceeded estimates, revenues missed Wall Street expectations by a small margin. The decline in advertisement revenue negatively impacted the company’s top line. Overall, the stock of Walt Disney ended Thursday’s trading session at $90.34, up 6.91% or $5.84 from the prior close.
The Burbank, California-based company posted fourth-quarter revenues of $21.24 billion, up 5% from $20.15 billion in the comparable quarter last year.
For the fourth quarter, which ended September 30, 2023, Walt Disney recorded a net income of $264 million, or $0.14 per share, compared with a net income of $162 million, or $0.09 per share, in the quarter ended October 1, 2022.
Excluding restructuring and impairment charges, amortization of TFCF and Hulu intangible assets, and fair value step-up on film and television costs, among others, the 4Q 2023 net income was $1.93 billion, or $0.82 per share, an increase from $649 million, or $0.30 per share, in 4Q 2022.
Analysts surveyed by LSEG (formerly Refinitiv) had anticipated the company to report earnings of $0.70 per share on revenues of $21.33 billion. Notably, this is the second successive revenue miss since 2018.
Commenting on the results, Robert Iger, Chief Executive Officer, of The Walt Disney Company, stated “Our results this quarter reflect the significant progress we’ve made over the past year.”
Segment wise:
- Entertainment revenues rose by 2% y-o-y to $9.52 billion. Specifically, Linear Networks revenues fell by 9% y-o-y to $2.63 billion. Direct-to-consumer revenues were $5.04 billion, up 12% on a y-o-y basis. Content sales/licensing revenues decreased 3% y-o-y to $1.86 billion.
- Sports revenues remained almost flat at $3.91 billion. In Particular, Domestic revenues grew by 1% to $3.46 billion. International revenues rose by 2% to $363 billion.
- Experiences revenues were $8.16 billion, up 13% from last year. While Domestic parks revenues inched up 7% to $5.38 billion, International revenues jumped 55% to $1.66 billion. Consumer products revenues fell by 5% to $1.11 billion.
- The company’s Disney+ subscribers increased by 7 million from the previous quarter to 150.20 million and surpassed StreetAccount forecasts of 148.15 million. Walt Disney also reported narrowed losses in its streaming business on a y-o-y basis. The company expects its streaming business to record profits in 4Q 2024.
Disney also revealed its intention to further slash its expenses through prudent cost-cutting initiatives. The company now aims to reduce expenses by another $2 billion in addition to the earlier announced $5.50 billion, taking the total target to $7.50 billion. However, Walt Disney made it clear that there would not be any additional layoffs.
The mixed quarterly results and expanded cost-cutting plan are expected to keep the stock of Disney range-bound in the short term.
The historical price chart indicates that Disney’s stock is ascending after consolidating between $80 and $86. The next major resistance is anticipated to be near $94. Additionally, the stock is trading above its 50-day moving average, while the ultimate oscillator is ascending toward the bullish region. Therefore, we anticipate Disney’s stock to remain in an uptrend in the near term.
Disclaimer: Any financial trading analysis offered here is our opinion and is not intended as advice or direction for investors. We cannot guarantee the success of any trades made as a consequence of this article, and we encourage traders to incorporate a strong money management strategy to limit losses when they enter the markets. Please use this article as part of your own research before formulating strategies prior to trading.
