Disney (DIS) shares dropped 2.4% in after-hours trading after releasing earnings, which modestly beat analysts' expectations while the company lost 4 million Disney+ subscribers.
- Disney reports diluted EPS of $0.69, up from $0.26 in the prior-year quarter.
- Revenues of $21.8 billion were up 13% year-over-year.
- Disney+ subscribers slowed, but losses narrowed for its streaming division.
The company reported 157.8 million Disney+ subscribers at the end of March, down 2.5% from 161.8 million at the end of 2022. Despite slowing subscriber numbers, streaming losses narrowed to $659 million from a loss of $887 million in the same period a year ago. Investors have started to put more focus on margins over subscriber numbers after former CEO Bob Iger returned to the role in November. A drive to cut costs by $5.5 billion includes another 7,000 job losses, on top of the 4,000 positions already lost.
“We’re pleased with our accomplishments this quarter, including the improved financial performance of our streaming business, which reflect the strategic changes we’ve been making throughout the company to realign Disney for sustained growth and success,” Iger said.
Disney reported second-quarter earnings per share of $0.69, up from $0.26 in the same quarter a year earlier. Revenue matched analysts' expectations of $21.8 billion, up 13% year-over-year.
The entertainment giant reported a strong improvement in free cash flow at $1.98 billion versus $686 million a year ago.
Segment revenue was higher, with Parks, Experiences, and Products division gaining 17%, while Media and Entertainment division revenue rose 3%, dragging down operating income, which fell to $3.28 billion from $3.69 billion a year earlier. Domestic revenue dropped 3% due to cable and broadcasting, while international fell 18%, as ad revenue declined.