Iger has Disney beating forecasts
News comes as CEO is expected to proxy challenges in the spring
Walt Disney Co. reported better-than-expected earnings for its fiscal first quarter and issued an upbeat profit outlook for the year, giving Chief Executive Officer Bob Iger ammunition to deflect proxy challenges this spring.
Earnings rose to $1.22 a share, excluding some items, Disney said Wednesday. That beat the 99cent average of Wall Street estimates.
Revenue was little changed at $23.5 billion in the period ended Dec. 30 and just shy of the $23.8 billion average of estimates compiled by Bloomberg, held back by Disney's struggling TV business and two theatrical misses, The Marvels and Wish.
Thanks to cost cutting, Disney said profit this year will rise at least 20% to about $4.60 a share, topping estimates of $4.27. The strong results stand to help Iger help fend off activist investor Trian Fund Management LP, which has nominated its founder Nelson Peltz and former Disney finance chief Jay Rasulo to the entertainment giant's board.
In a nod to investors, Burbank, Californiabased Disney raised its dividend by 50% to 45 cents a share and approved a $3 billion stock repurchase program for the year.
Shares of Disney gained 7.8% in premarket trading before New York exchanges opened on Thursday, which would be the biggest intraday gain since November if it holds at the open. The company also announced it's acquiring a $1.5 billion stake in Epic Games Inc. as part of a collaboration with the company that makes the popular Fortnite title.
Subscribers to the Disney+ streaming service fell to 149.6 million in the quarter, missing projections of 151.2 million, while overall losses in streaming, including Hulu and ESPN+, shrank to $216 million from $1.05 billion a year ago.
However, the company expects to add as many as 6 million core Disney+ subscribers this period and continues to predict its streaming operation will reach profitability by the fourth quarter of the current fiscal year.
The bright spot for Disney last quarter was its international parks, where profit rose more than fourfold and sales increased 35% from last year, when Covid closures were still in place. That more
than countered a modest 4% gain in revenue at its domestic resorts and a 2% drop in profit, with attendance falling at Walt Disney World in Florida.
Disney's international parks also benefited from new a Frozen attraction in Hong Kong and Zootopia in Shanghai.
The company's traditional media businesses continued to struggle, hurt by an accelerating decline in its broadcast and cable TV — led by ABC — and continued losses at the division that includes the film studio. The movie division has registered quarterly losses for most of the past two years.
Revenue from content sales and licensing — including the film studio — fell 38% from a year earlier, while sales at Disney's domestic TV networks slumped 14% last quarter, worsened by strikes that shut down production in Hollywood.
On Tuesday, Disney announced plans to bundle ESPN content with programming from Fox Corp. and Warner Bros. Discovery Inc. to create a new sports-focused streaming service.