The Walt Disney Company reported improved results last quarter as revenue rose and net profit nearly tripled.
The company reported that it reduced losses at its streaming service, Disney+, by increasing prices. However, Disney+ did lose 4 million global subscribers from the previous quarter to 157.8 million, mainly due to cancellations in India.
Disney shares fell 5% in extended trading.
The entertainment giant reported a 13% lift in its second-quarter revenue compared to the same period last year, with it coming in at about $21.82 billion – topping the $21.79 billion that Refinitiv analysts had projected.
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Diluted earnings per share "excluding certain items" hit $0.93, on-par with the analyst-expected figure.
The Disney Media and Entertainment Distribution (DMED) segment comprised $14.04 billion of the company’s total quarterly revenue, marking a 3% jump.
Under the DMED segment, Disney reported the quarterly operating loss for its direct-to-consumer services was $659 million, roughly 26% smaller than what it posted in the same period last year. It linked that to "improved results at Disney+ and ESPN+, partially offset by lower operating income at Hulu."
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Overall, the company’s streaming services now have a total of over 231.3 million subscribers. In comparison, it had 234.7 million in the first quarter and 205.6 million in 2022’s second quarter.
CEO Bob Iger highlighted the reduction in streaming’s operating loss during his opening remarks on the earnings call, adding he was "very optimistic" about Disney’s "longer-term" direct-to-consumer business.
One step Disney will take for "creating a growth business" with streaming is to "soon begin offering a one-app experience domestically that incorporates our Hulu content via Disney+." That will come before the year’s end, Iger said.
He indicated the ad-free Disney+ subscription option will see a price hike later in 2023 "to better reflect the value of our content offerings."
Linear networks, with $6.63 billion in second-quarter revenue and $1.83 billion in operating income, was also included under DMED in the earnings report.
Meanwhile, about $7.78 billion of Disney’s revenue came from its parks, experiences and products segment. In 2022, the company posted $6.65 billion in the same three-month timeframe, meaning it rose 17% year-over-year.
Iger told analysts and investors Disney was "on track to meet or exceed" the $5.5 billion it is aiming to save as part of its massive restructuring, which includes making the company have three segments and reducing its workforce by about 7,000.
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"From movies to television, to sports, news, and our theme parks, we continue to deliver for consumers, while establishing a more efficient, coordinated, and streamlined approach to our operations," Iger was quoted as saying in the earnings release.
