Disney Eyes Streaming Growth Amidst Netflix's Dominance
Earnings Overview
* Disney (DIS) expects to revive growth in its streaming segment this year.
* Disney+ subscribers reached 125 million in the recent quarter, slightly below expectations.
* Netflix continues to dominate the streaming market, adding 19 million subscribers in the same period.
* Disney's total adjusted EPS rose 44% year-over-year, exceeding estimates.
Cost-Cutting and Profitability
* Disney's cost-cutting measures under CEO Bob Iger have significantly improved profitability.
* The direct-to-consumer business generated $298 million in operating profits, compared to a $138 million loss the previous year.
* The entertainment segment witnessed a 95% increase in operating profit due to strong box office performances and cost controls.
Streaming Challenges and Outlook
* Disney+ experienced sluggish growth, gaining only 1% sequentially.
* The company anticipates improved content offerings later this year, including ESPN+ integration and paid sharing options.
* Disney's guidance for high-single-digit percentage earnings per share growth in fiscal 2025 indicates confidence in continued margin improvement.
* However, ongoing challenges in the linear TV business and Disney+'s slow subscriber growth may impact investor sentiment.
* Linear network sales and operating profits declined by 7% and 11%, respectively, in the recent quarter.
* Analysts question the sustainability of recent growth in the experiences division, given its significant contribution to Disney's earnings.