Current:Home > NewsFour takeaways from Disney's earnings call-InfoLens
Four takeaways from Disney's earnings call
View Date:2024-12-23 15:11:21
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! (57)
Related
- Nearly 80,000 pounds of Costco butter recalled for missing 'Contains Milk statement': FDA
- Federal judge blocks California law that would ban carrying firearms in most public places
- A police SUV slammed into a bar in St. Louis. Police response drawing scrutiny
- Kamala Harris to embark on reproductive freedoms tour as Biden campaign makes abortion a central issue
- Round 2 in the Trump-vs-Mexico matchup looks ominous for Mexico
- Morgan Wallen makes a surprise cameo in Drake's new music video for 'You Broke My Heart'
- ‘You are the father!’ Maury Povich declares to Denver Zoo orangutan
- Grammy nominee Gracie Abrams makes music that unites strangers — and has Taylor Swift calling
- Sports are a must-have for many girls who grow up to be leaders
- Apple loses latest bid to thwart patent dispute threatening to stop U.S. sales of two watch models
Ranking
- Bill on school bathroom use by transgender students clears Ohio Legislature, heads to governor
- How 'Iron Claw' star Zac Efron learned pro wrestling 'is not as easy as it looks on TV'
- Philadelphia news helicopter crew filmed Christmas lights in New Jersey before fatal crash
- Dollar General robbery suspect shot by manager, crashes into bus, dies: Texas authorities
- Shel Talmy, produced hits by The Who, The Kinks and other 1960s British bands, dead at 87
- Chilling 'Zone of Interest' imagines life next door to a death camp
- Wells Fargo workers at New Mexico branch vote to unionize, a first in modern era for a major bank
- 'I'm gonna die broke': Guy Fieri explains how his family could inherit Flavortown
Recommendation
-
A herniated disc is painful, debilitating. How to get relief.
-
Ja Morant back in Memphis where his return should help the Grizzlies fill seats
-
Science says declining social invites is OK. Here are 3 tips for doing it
-
Man accused of texting death threats to Ramaswamy faces similar charges involving 2 more candidates
-
3 Iraqis tortured at Abu Ghraib win $42M judgement against defense contractor
-
Wisconsin leader pivots, says impeachment of state Supreme Court justice over redistricting unlikely
-
Greek government says it stands by same-sex marriage pledge even after opposition from the Church
-
New contract for public school teachers in Nevada’s most populous county after arbitration used