Walt Disney Co (NYSE:DIS) stock rose 7.39% (As on November 9, 11:43:37 AM UTC-4, Source: Google Finance) after the company reported better-than-expected Earnings per Share and seeks an additional $2 billion in cost savings. Disney’s flagship theme parks delivered the biggest profit boost, with earnings rising 31% to $1.76 billion in the period ended Sept. 30. Revenue in the division, which includes consumer products, grew 12% to $8.16 billion, led by 55% growth internationally. Losses in Disney’s streaming business, including ESPN+, narrowed to $387 million in the quarter, coming in better than Wall Street projected. The company has said it’s seeking to turn a profit in that business by the fourth quarter of the new fiscal year just getting underway. Globally the number of Disney+ paying subscribers rose to more than 150.2 million, beating estimates of 147.4 million and returning sign-ups to growth. So-called core Disney+ subscribers grew 7% to 112.6 million. Key streaming content in the quarter included theatrical titles Elemental, Little Mermaid and Guardians of the Galaxy Vol. 3., original series Ahsoka and the Korean original series Moving.
Further, earnings from the company’s entertainment networks were little changed at $805 million, while revenue slumped 9.1% to $2.63 billion. Like other broadcasters, Disney is suffering from falling ad sales and lower subscriber revenue at traditional TV networks. Disney is also buying rival Comcast Corp.’s one-third stake in the Hulu streaming service for at least $8.61 billion.
DIS in the fourth quarter of FY 23 has reported the adjusted earnings per share of 82 cents, beating the analysts’ estimates for the adjusted earnings per share of 69 cents. The company had reported 5 percent increase in the adjusted revenue to $21.2 billion in the fourth quarter of FY 23, missing the analysts’ estimates for revenue of $21.4 billion. Cash provided by operations increased by $3.9 billion from $6.0 billion in the prior year to $9.9 billion in the current year. The increase was primarily due to lower spending on film and television content and higher operating income at Experiences, partially offset by the timing of payments for sports content.
Additionally, the company continues to aggressively manage our cost base, and have increased our annualized efficiency target to $7.5 billion, versus $5.5 billion previously.
The company expects to grow free cash flow in fiscal 2024 significantly versus fiscal 2023, approaching levels last seen pre-pandemic. This continued robust free cash flow growth, alongside the strong balance sheet, will position the company well to address the investment and shareholder goals for the year and going forward