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Disney’s Stock Rises as Earnings Improve and Streaming Subscriber Growth is Enormous

Following the media behemoth’s announcement of earnings that exceeded forecasts, a sharp growth in streaming users, and a commitment to raise yearly cost reductions to $7.5 billion from $5.5 billion, Walt Disney Co.’s stock surged 3.3% in extended trading on Wednesday.

Following the results’ announcement, Disney Chief Executive Robert Iger said in an interview with CNBC, “We are most focused on profitability by the end of fiscal 2024.” Disney, according to him, plans to considerably increase free cash flow in fiscal 2024, getting close to levels last attained before the epidemic.

Disney DIS, -0.11% announced a net income of $264 million, or 14 cents per share, for the fiscal fourth quarter. Disney announced earnings of 82 cents per share after deducting restructuring costs and other factors. Revenue increased from $20.15 billion to $21.24 billion, a 5% increase.

In a FactSet survey, analysts projected adjusted earnings per share of 71 cents on $21.37 billion in revenue.

Disney revised the way its business segments are divided. The biggest, entertainment, brought in $9.52 billion, a 2% increase over the same period last year.

Experiences earned $8.2 billion, up 11% from $7.3 billion in revenue the previous year. ESPN is a part of sports, which brought around $3.9 billion. Iger declared, “ESPN is the top brand on TikTok.”

Driven by revenues on Disney+ and Hulu, Iger subsequently told investors that the advertising business isn’t as “bad as some people think it is.”

Disney+ saw a gain of around 7 million members worldwide, which resulted in a much smaller quarterly loss of $387 million as opposed to a loss of $1.47 billion during the same period previous year. Iger gave credit to the success of films such as “Elemental,” “Little Mermaid,” and “Guardians of the Galaxy Vol. 3,” in addition to the Korean original series “Moving” and the original series “Ahsoka.”

The business announced that in December, a beta version of a Disney+/Hulu streaming app will be available to bundle subscribers. According to Iger, the service will formally start in late March 2024.

Disney, the media behemoths Apple Inc. AAPL, +0.59%, Netflix Inc. NFLX, +0.47%, Inc. AMZN, -0.44%, Warner Bros. Discovery Inc. WBD, -19.04% D, Comcast Corp. CMCSA, -1.24%, and others are competing with Disney, which announced a pricing hike in August, for supremacy in the streaming space.

The corporation is dealing with a maze of issues as it commemorates its 100th anniversary. Iger has to deal with a lengthy actors’ strike, a decline in attendance at Disney World Resort in Orlando, Florida, legal issues with Republican presidential contender Florida Gov. Ron DeSantis, and uncertainty about a CEO succession plan while he races to earn a profit with the streaming company.

“You can see from the results that we got today that not only are our domestic parks doing great—in fact, we had some tough comparisons with the Florida parks—but our international parks and cruise business are also doing incredibly well,” Iger stated in the CNBC interview.

During the analyst call, Kevin Lansberry, Disney’s interim chief financial officer, described attendance at Disneyland Park in Anaheim, California, as “very strong.”

Disney’s stock has dropped 2.7% this year and is at its lowest point in almost ten years. Since Iger took over as CEO a year ago, the company’s shares have decreased 8%. SPX, the S&P 500, has increased by 14%.

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