Current:Home > FinanceFour takeaways from Disney's earnings call -Edge Finance Strategies
Four takeaways from Disney's earnings call
View
Date:2025-04-15 14:42:43
Disney owns so many global brands, in-person experiences, characters and storylines that when one asset falters, another offsets the loss. The company beat analysts' expectations, with revenues for the quarter and the year growing 5% and 7%, respectively.
Here are four takeaways from Wednesday's earnings call:
1. Streaming: Disney+ is still not profitable but losing a lot less. This time last year, the streaming service lost nearly $1.5 billion. This past quarter, it lost just $387 million. "Who would have thought in any sort of business we would be celebrating a loss of just $387 million," jokes Brandon Katz, an entertainment industry strategist for Parrot Analytics.
Katz points out that streaming is costly and that only Netflix is "consistently profitable." He says Disney is "making steady progress," especially now that it controls Hulu. With plans for a single app that will offer both Disney+ and Hulu content, Katz believes it'll attract a much broader audience and create a "more seamless entertainment experience for consumers because we audiences, we are lazy and I mean that in the best way possible. I'm a proud couch potato and what we want is not to be spending so much time seeking out content."
Disney+ added 7 million subscribers this quarter. Iger said he believes the company's streaming business will be profitable in the latter part of 2024.
2. Theme parks/resorts/cruises: Disney's Experiences is a major profit driver. The division saw a 13% increase in revenue to $8.16 billion, with growth at almost all of its international and domestic sites. Disney recently announced it would invest $60 billion to, as Iger put it, "turbocharge" its parks, resorts, cruises and the like.
The only site that has not done well is Walt Disney World in Florida. The company said declines there were due to the end of its 50th anniversary celebrations, the closing of Star Wars: Galactic Starcruiser, and wage inflation.
After several months of negotiations, Disney agreed to raise union workers' pay to $18 per hour by the end of 2023, with additional increases over the next three years. "Those employees have earned the right to be paid more," says Rick Munarriz, senior media analyst at The Motley Fool. "It's not easy dealing with tourists... But of course, it does mean that... profits do take a hit in the process."
3. ESPN: Disney is all in to take ESPN direct-to-consumer. The company says the sports network's revenue has grown year over year. During the earnings call, Iger said ESPN is the number 1 brand on TikTok "with about 44 million followers." He said they're hoping to find partners, including sports leagues, that would help them with technology, marketing and content with the goal of turning ESPN into a "preeminent digital sports platform."
4. Striving for growth while cutting costs: While touting ambitions for ESPN and its theme parks, Disney said it plans to "aggressively manage" costs, increasing its "efficiency target" by $2 billion.
"Disney has been attempting to walk this financial tightrope like an expert circus performer over the last 12 months or so," says Katz, "And what they're trying to do is...invest in their products, in programming... streaming expansion... But they're trying to do that while also managing the debt."
Disney has its eyes on the future, says Munarriz. "Because of the strength of the theme parks and then the success of Disney+ and its other streaming services, it's able to get to the point where for next year it will be back to pre-pandemic levels, which is very interesting because this is a stock that hit a nine-year low just a couple of weeks ago... But Disney seems pretty confident that it's going to be, you know, at peak form within the new year."
As Iger put it, Disney is moving "from a period of fixing to a period of building."
veryGood! (5292)
Related
- California DMV apologizes for license plate that some say mocks Oct. 7 attack on Israel
- These Fun Facts About Travis Kelce Are All Game Winners
- Man charged with helping Idaho inmate escape during a hospital ambush sentenced to life in prison
- How Trump credits an immigration chart for saving his life and what the graphic is missing
- Trump wants to turn the clock on daylight saving time
- What's in the new 'top-secret' Krabby Patty sauce? Wendy's keeping recipe 'closely guarded'
- Devils' Jacob Markstrom makes spectacular save to beat Sabres in NHL season opener
- Why Tom Selleck Was Frustrated Amid Blue Bloods Coming to an End
- Warm inflation data keep S&P 500, Dow, Nasdaq under wraps before Fed meeting next week
- Leslie strengthens into a hurricane in the Atlantic but isn’t threatening land
Ranking
- Hackers hit Rhode Island benefits system in major cyberattack. Personal data could be released soon
- Shaboozey Reveals How Mispronunciation of His Real Name Inspired His Stage Name
- How many points did Bronny James score tonight? Lakers-Timberwolves preseason box score
- You may want to think twice before letting your dog jump in leaves this fall
- 'We're reborn!' Gazans express joy at returning home to north
- Devils' Jacob Markstrom makes spectacular save to beat Sabres in NHL season opener
- Allan Lichtman shares his 2024 presidential election prediction | The Excerpt
- Blowout September jobs data points to solid economy and slower Fed rate cuts, analysts say
Recommendation
New Zealand official reverses visa refusal for US conservative influencer Candace Owens
Lionel Messi, Inter Miami rely on late goal to keep MLS record pursuit alive
Opinion: Please forgive us, Europe, for giving you bad NFL games
After the deluge, the lies: Misinformation and hoaxes about Helene cloud the recovery
Tom Holland's New Venture Revealed
Man deemed violent predator caught after removing GPS monitor, escaping and prompting 3-day search
Virginia man charged with defacing monument during Netanyahu protests in DC
Officer who killed Daunte Wright is taking her story on the road with help from a former prosecutor