The Walt Disney Company reported its first quarter earnings of 2024 on Wednesday and with it came several “significant announcements that represent important and exciting steps forward,” according to Chief Executive Officer Bob Iger.
“Just one year ago, we outlined an ambitious plan to return to a period of sustained growth and shareholder value creation, and our strong performance this past quarter demonstrates we have turned the corner and entered a new era,” Iger said during his post-earnings remarks on Wednesday.
For the quarter, Disney’s net income rose to $1.91 billion, up from $1.28 billion, in the prior-year period. Revenue was about flat at $23.55 billion, compared with $23.51 billion in the year-ago quarter.
Disney’s direct-to-consumer unit reported a $138 million operating loss in the quarter. Including the performance at ESPN+, losses for all its streaming businesses narrowed to $216 million, from $1.05 billion in the prior-year period.
Disney+ core subscribers shrank by 1.3 million from the prior quarter due to price increases, but the company saw a rise in average revenue per user because of those subscription cost hikes, CNBC reported.
Here are the announcements made by Disney
As announced on Tuesday, the full suite of ESPN’s channels will now be available direct to consumer as part of a new joint venture with Fox and Warner Brothers Discovery to create a new streaming sports service, launching this fall. This brings together content from across all of these companies’ combined assets, including all the major professional sports leagues and college sports.
By fall of 2025, Disney will offer ESPN as a stand-alone streaming option with innovative digital features, creating a one-stop sports destination unlike anything available in the marketplace today.
Disney will release a feature-length animated sequel to Moana, which joins a robust lineup of upcoming theatrical releases.
Disney is entering into a relationship with Epic Games, acquiring a small equity stake and launching a new games and entertainment universe that brings together Disney’s brands and franchises with the hugely popular Fortnite.
Disney+ will become the exclusive streaming home of Taylor Swift’s historic concert film, Taylor Swift | The Eras Tour (Taylor’s Version).
Disney’s Board declared a cash dividend of $0.45 a share payable in July 2024 and Disney is targeting to repurchase up to $3 billion in aggregate of Disney’s common stock in fiscal 2024.
“What’s clear is that the important transformation we undertook last year is bearing fruit,” Iger added. “And looking at our results this quarter, we can say with confidence our strategy is working.”
Key Points
The company said it’s on track to achieving significant cost reductions across our businesses, as evidenced by the realization of over $500 million in selling, general and administrative and other operating expense savings across the enterprise in the first quarter. It is on track to meet or exceed the $7.5 billion annualized savings target by the end of fiscal 2024, while it will continue to look for further efficiency opportunities.
Further, it will continue to expect free cash flow generation in fiscal 2024 to total roughly $8 billion.
“We continue to expect to reach profitability at our combined streaming businesses in the fourth quarter of fiscal 2024, and are making tremendous progress in this area, with first quarter Entertainment DTC operating losses improving by nearly $300 million versus the prior quarter. We believe this business will ultimately be a key earnings growth driver for the Company,” Disney stated.
Hulu subscribers increased by 1.2 million from the prior quarter. Disney+ Core subscribers decreased sequentially by 1.3 million, in line with prior guidance and reflecting a substantial price increase in the quarter as well as the end of the global summer promotion. Disney+ Core ARPU increased sequentially by $0.14 versus the fourth quarter.
“We expect Disney+ Core subscriber net additions of between 5.5 and 6 million and ongoing positive momentum in ARPU in the second quarter. ESPN’s domestic business grew both revenue and operating income year over year in the first quarter, and we continue to build ESPN into the world’s preeminent digital sports platform,” the company stated.
Sports operating income improved versus the prior year due to strength at ESPN, partially offset by lower results at Star India, driven by higher rights costs from airing of the ICC Cricket World Cup.
Disney’s streaming service Disney+ Hotstar added 0.7 million paid subscribers to take its subscriber base to 38.3 million for the first quarter ended December 30, 2023, benefiting from increased usage during the ICC Cricket World Cup 2023. The increase in the subscriber base comes after the streaming service clocked four straight quarters of subscriber decline, in which it lost about 12.5 million subscribers.
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