Disney Profit Tops Estimates, Shares Rise Late
Walt Disney (DIS) shares jumped on Wednesday after the leisure big beat earnings estimates, floated the resumption of dividend funds by 12 months’s finish, and stated it plans to chop 7,000 jobs to cut back prices.
Disney reported an adjusted fiscal first quarter revenue of 99 cents per share, exceeding the 77 cents estimated by analysts surveyed by Seen Alpha. Whereas revenue fell 7% from a 12 months earlier, income climbed 8%.
| Walt Disney Earnings Outcomes | |||
|---|---|---|---|
| Metric | Beat/Miss/Match | Reported Worth | Analysts’ Prediction |
| Adjusted Earnings Per Share ($) | Beat | 0.99 | 0.77 |
| Income ($ B) | Beat | 23.5 | 23.4 |
Supply: Predictions primarily based on analysts’ consensus from Seen Alpha
Disney’s theme parks posted a 21% income achieve and everything of working revenue, whereas the corporate’s media and leisure distribution section had direct-to-consumer losses of greater than $1 billion primarily from the Disney+ streaming platform, which offset the earnings at ESPN, ABC and different tv belongings.
Key Takeaways
- Walt Disney earnings and income topped estimates late Wednesday.
- The leisure big earned 99 cents per share on an adjusted foundation, down from $1.06 per share a 12 months earlier.
- Shares rose 6% late after CEO Bob Iger stated he plans to announce the resumption of “modest” dividend funds by the top of the 12 months; 7,000 jobs to be reduce.
- Theme parks powered the outcomes, whereas tv revenue helped to offset losses at Disney+.
- Disney’s cost-cutting marketing campaign is focusing on $2.5 billion in annual financial savings.
CEO Bob Iger, lately returned to the corporate’s high job after the abrupt firing of his predecessor Bob Chapek in November, stated on the earnings convention name that he’ll ask the board to renew dividend funds suspended within the spring of 2020 by the top of the 12 months, “now that the pandemic impacts to our enterprise are largely behind us.”
The dividend will initially be “modest,” Iger, stated, with funding for it to come back from a cost-cutting marketing campaign Disney is relying on to reserve it $2.5 billion yearly. The corporate posted a free money circulate deficit of practically $2.2 billion within the newest quarter.
Iger, 71, opted to not announce any restructuring initiatives past these he is already launched. The CEO beforehand led Disney from 2005 to 2020, and his new two-year contract assumes he’ll assist the corporate discover a successor by late subsequent 12 months earlier than stepping down.
“After a stable first quarter, we’re embarking on a major transformation,” Iger stated within the earnings launch. “The work we’re doing to reshape our firm round creativity, whereas lowering bills, will result in sustained development and profitability for our streaming enterprise, higher place us to climate future disruption and international financial challenges, and ship worth for our shareholders.”
Iger is going through a proxy battle waged by activist shareholder Nelson Peltz, who’s in search of to switch one of many firm’s nominees on its board. Some analysts have speculated that the corporate might search to spin off ESPN, which faces stress from cable cord-cutting and escalating sports activities rights charges. The majority of Disney’s weak spot in its linear networks unit throughout the quarter got here on declines abroad in belongings it acquired as a part of its twentieth Century Fox acquisition in 2019.
