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Disney CEO Bob Iger believes the company’s fiscal Q1 2023 earnings report points towards sustained growth and profitability.
The Walt Disney Company (NASDAQ: DIS) recently reported its fiscal Q1 2023 earnings results which beat consensus estimates. The entertainment conglomerate’s earnings beat on the top and bottom lines, as it also sustained a less-than-initially-feared drop in subscriber numbers.
Although Disney’s linear TV and direct-to-consumer units took a hit during the fiscal quarter, its theme parks experienced marked growth year-over-year (YoY). In addition, the California-based entertainment giant’s shares were up 5% during the early morning trading session.
For fiscal Q1 2023, Disney pulled in revenue of $23.51 billion compared to the $23.37 billion analysts expected. Furthermore, the company’s earnings per share (EPS) came in at 99 cents versus the consensus estimate of 78 cents for the same period. In addition, Disney reported total subscriptions for its popular Disney+ streaming service as 161.8 million for the fiscal quarter. This number represented a less-than-feared decline of around 2.4 million subscribers for the quarter. However, Disney’s latest subscriber numbers surpassed the 161.1 million subscription base that analysts anticipated.
Disney Fiscal Q1 2023 Subscription Losses Less Than Expected
Expectations were high that Disney would lose several subscribers following its recent price hike for streaming services. Although 2.4 million Disney+ accounts opted not to renew during the last fiscal quarter, previous expectations suggested the company would lose over 3 million subscribers. This means that fiscal Q1 2023 turned out better than expected for Disney in this regard.
On Wednesday, Disney explained that it would no longer provide long-term subscriber guidance. According to the company’s CEO Bob Iger this development seeks to move beyond the emphasis on short-term quarterly metrics. Streaming rivals Netflix (NASDAQ: NFLX) also made a similar decision late last year.
Iger, who experienced his first earnings since returning to Disney last November, also touched on the company’s overall quarterly performance. In a statement ahead of Disney’s earnings call, the seasoned media executive explained:
“We believe the work we are doing to reshape our company around creativity while reducing expenses will lead to sustained growth and profitability for our streaming business, better position us to weather future disruption and global economic challenges, and deliver value for our shareholders.”
Expectations suggest that Iger’s return to Disney could help the company cut down on expenses and empower its content creators once again. As Iger noted:
“I have always believed that the best way to spur great creativity is to make sure the people who are managing the creative processes feel empowered.”
Furthermore, the veteran Disney CEO pointed out that the company is “fuelled by storytelling and creativity,” thus owing its success to this fact.
Iger announced that Disney would restructure, downsize its headcount, and slash $5.5 billion in costs. Furthermore, the media and entertainment powerhouse would also reorganize into three divisions: Entertainment, ESPN, and parks and experiences.
Disney Entertainment comprises most of the company’s streaming and media operations, while parks, experiences, and products cater to customer thrill-seeking. Lastly, Disney’s ESPN division would entail the media giant’s TV network and the ESPN+ streaming service.
Iger also revealed plans for Disney’s board to approve the reinstatement of its dividend at the end of the calendar year.