Walt Disney Co. fell into the red in the second quarter due to restructuring and impairment charges, but adjusted profit exceeded expectations and its streaming business was profitable. Theme parks also continue to perform well, and the company has raised its outlook for this year.
Disney said on Tuesday that it expects its overall streaming business to slow this quarter due to its streaming service Disney+Hotstar in India, but the combined streaming business will be profitable in the fourth quarter and has a meaningful future. He said he expects this to become a growth engine. We aim to further improve profitability in fiscal 2025.
Disney+ core subscribers grew more than 6% in the second quarter.
“Looking at our company as a whole, it is clear that the turnaround and growth efforts we embarked on last year continue to deliver positive results,” CEO Bob Iger said in a prepared statement. Ta.
This is the first financial report since shareholders rejected efforts by activist investor Nelson. Peltz He won a seat on the board last month and is a firm supporter of Iger, who is trying to revitalize the House of Mouse.
Disney reported a 7% increase in domestic theme park revenue and a 29% increase in international theme park revenue.
However, Disney acknowledged that it struggled with rising costs at its theme parks during the quarter due to inflation.
The company said guest spending increased at Walt Disney World due to higher ticket prices, and at Disneyland, guest spending increased due to increased ticket prices and hotel room rates.
Overseas, Hong Kong Disneyland benefited from the opening in November of Frozen World, a section of the park that includes rides themed to the popular movie Frozen.
For the period ended March 30, Disney suffered a loss of $20 million, or one penny per share. That compares to profit of $1.27 billion, or 69 cents per share, a year ago.
Restructuring and impairment charges jumped to $2.05 billion from $152 million in the same period last year.
Adjusted earnings, excluding fees and other charges, came to $1.21 per share, easily exceeding the $1.12 per share expected by analysts surveyed by Zacks Investment Research.
Disney said its second-quarter results led it to set a full-year adjusted earnings per share growth target of 25%. Previous expectations were for growth to be at least 20%.
The Burbank, Calif., company’s revenue rose to $22.08 billion from $21.82 billion a year earlier, but was slightly below Wall Street’s estimate of $22.13 billion.
The stock fell 6% before the market opened.
Walt Disney Co. announced in February that it was implementing “significant cost savings,” reducing selling, general and other operating expenses by $500 million in the first quarter.company cut thousands of jobs In 2023.
In March, allies of Gov. Ron DeSantis and Disney reached an agreement. settlement An agreement has been reached in a state court battle over how Walt Disney World will be developed in the future following Florida’s governor’s takeover of the theme park and resort government.
Last month, the character performers at California’s Disneyland and the union that organizes them, the Actors Equity Association, made the announcement. they filed a petition For trade union recognition.