Walt Disney (DIS) unveiled stronger-than-expected first quarter earnings Wednesday, but posted the first decline in subscribers to its Disney+ streaming service following the return of CEO Bog Iger to the helm of the media and entertainment group late last year.
Iger also revealed plans for sweeping changes within the group's operating structure, including 7,000 layoffs, $5.5 billion in cost cuts and a new three-part organizational structure focused on Parks, Entertainment and ESPN.
Iger also said Disney would restore its regular dividend, which it suspended during the peak of the pandemic in 2020, by the end of the calendar year.
Disney said adjusted diluted earnings for the three months ending in December, the group's fiscal first quarter, came in at 99 cents per share, down 6.6% from the same period last year but well ahead of the Street forecast of 78 cents per share.
Group revenues, Disney said, rose 7.7% to $23.51 billion, narrowly topping Street forecasts of $23.4 billion.
Disney lost 2.4 million subscribers over the whole of the quarter, although ESPN+ subs rose 2% to 24.9 million and was Hulu up 2% to 48 million. Disney+ total subs of 161.8 million, however, were down 1% following a 37.5% price increase for an annual Disney+ account put in place late last year.
The Direct-to-Consumer division, however, saw its operating loss narrow to around $1.05 billion from the $1.5 billion loss recorded over the three months ending in September.
“After a solid first quarter, we are embarking on a significant transformation, one that will maximize the potential of our world-class creative teams and our unparalleled brands and franchises,” Iger said.
“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,” he added
Disney shares were marked 8.5% higher in after-hours trading immediately following the earnings release to indicate a Wednesday opening bell price of $121.31 each, a move that would extend the stock's year-to-date gain to around 36.1%.
Parks and Experiences revenues came in at $8.74 billion, topping the Street's estimate and rising more than 21% from last year as visitors returned to re-open resorts and cruises around the world, particularly in China. Operating income for the division was $3.1 billion, Disney said.
