Disney CEO Bob Iger says company is now in ‘construction’ phase – The Hollywood Reporter
The Walt Disney Company, having restructured its operations, is now moving into its next phase with CEO Bob Iger’s second role leading the entertainment giant.
Naturally, Iger rejoined the company a year ago with a mandate to “set a new strategic direction” for the company. In a commentary linked to Disney’s latest quarterly earnings report (fiscal Q4), Iger suggested that the company’s future actually starts now.
“While we still have work to do, these efforts have allowed us to get through this repair period and begin building our business again,” Iger said in a statement. “We have a solid foundation of creative excellence and innovation built over the last century, which has only been strengthened by the significant restructuring and cost efficiency work we have undertaken this year, and we are on track to achieve approximately $7.5 billion in cost reductions. To The aspect of our portfolio of companies, brands and valuable assets – and the way we manage them together – Disney has a strong hand that sets us apart from others in our industry.
The $7.5 billion figure represents an increase of $2 billion over the previously planned figure of $5.5 billion.
Disney reported revenue of $21.2 billion in the quarter, narrowly below Street estimates but up slightly from a year ago. Operating income was $2.9 billion with diluted earnings per share of $0.82, beating Street estimates.
In streaming, the company added 7 million core Disney+ subscribers (excluding Star), with direct-to-consumer streaming companies continuing to lose money. Last quarter, Disney’s streaming business lost a total of $387 million in entertainment and sports, but the company now has more than 150 million Disney+ subscribers.
Hulu’s subscriber count was essentially flat compared to last year. Disney+’s average revenue per user (ARPU) was up slightly thanks to increased ad revenue, while Hulu’s average revenue per user (ARPU) was down slightly due to lower ad revenue.
The company’s new financial reporting structure was built around three operating areas: entertainment, sports and experiences, and the biggest change was separating ESPN’s finances from the rest of the company’s linear and streaming offerings.
In entertainment, revenue was $9.5 billion, with direct-to-consumer accounting for more than $5 billion of that number. Income reached $236 million, with all profits offset by linear losses in live streaming.
In sports, ESPN saw its revenue rise slightly to $3.8 billion, with operating income up 16% to $987 million.
In parks and experiences, revenue rose 13% to $8.2 billion, with operating income up 31% to $1.8 billion.