Disney ( DIS ) reported quarterly earnings after the bell on Wednesday, slightly missing expectations as the company implemented massive layoffs in an effort to cut $5.5 billion in costs and shed 7,000 jobs over the summer.
The report was the first since Disney announced its new three-pronged business reorganization — Disney Entertainment, ESPN, and Disney Parks, Experiences and Products — as CEO Bob Iger tries to streamline the media company and reset its strategy. The company will begin reporting under the new structure later this year.
Theme parks continued to outperform, with operating revenue hitting $2.17 billion in the quarter, echoing recent trends from rivals such as Comcast’s Universal ( CMCSA ).
Although Disney+ subscribers missed expectations, streaming losses narrowed to $659 million in the second quarter — above consensus estimates of $850 million — from a loss of $887 million a year earlier. The company reported a streaming loss of $1.1 billion in Q1 and a loss of $1.5 billion in Q4.
“We are pleased with our achievements this quarter, including the improved financial performance of our streaming business, which reflects the strategic changes we are making across the company to reposition Disney for sustainable growth and success,” Iger said in the earnings release. . “From movies to television, sports, news and our theme parks, we continue to deliver for consumers while establishing a more efficient, integrated and streamlined approach to our operations.”
The stock fell immediately following the release, with shares falling 2% in after-hours trading
Here are Disney’s second-quarter results compared to Wall Street’s consensus estimates compiled by Bloomberg:
Revenue: $21.82 billion vs $21.82 billion expected
Adj. Earnings per share (EPS): $0.93 and $0.94 are expected
Total Disney+ Subscribers: 157.8 million 163.1 million expected
Revenue from Disney Parks, Experiences and Products: $7.78 billion $7.67 billion is expected
Iger, who returned to the CEO role in November, has focused more on profits as investors shift focus away from subscriber growth and place more emphasis on margins. The company’s direct-to-consumer division, which includes Disney+, Hulu and ESPN+, spent more than $4 billion in its 2022 fiscal year, which ended Oct. 1, after spending $33 billion on content last year.
Since that time, Iger has worked hard to establish new revenue streams Disney’s ad-supported tier recently launchedVarious price hikes will help offset additional losses.
Iger has consistently reaffirmed the company’s outlook to reach streaming profitability by 2024, though it will be a bumpy road.
Hulu’s future hangs in the balance with concerns about profitability after Bob Iger said “Everything was on the table” About the company’s role in the streamer. Investors will be closely watching for additional commentary on the earnings call regarding the future of Hulu and Iger’s overall streaming vision.
Advertising continued as a headwind, as did competitors. Linear network revenues fell 7% in the quarter compared to the prior year.
On the parks side of the business, operating income beat expectations of $2.14 billion to reach $2.17 billion, up from Q2 2022’s $1.76 billion.
Parks rose to $3.05 billion in Q1 on strong domestic theme park trends. Despite higher risks to margins amid inflation, analysts remain largely bullish on the park business.
Earlier this year, Disney Announced the long-awaited updates Its parks reservation system and annual passholder program followed severe backlash from consumers over long wait times and sky-high ticket prices.
Alexandra Canal Senior reporter at Yahoo Finance. Follow her on Twitter @alliecanal8193 and email [email protected]
Click here for in-depth analysis including the latest stock market news and stock moving events
Read the latest financial and business news from Yahoo Finance