by Dawn Chmielewski
LOS ANGELES (Reuters) – Walt Disney on Wednesday reported weaker-than-expected quarterly results despite a cost-cutting campaign that is expected to save it more than the $5.5 billion pledge it made in February. last to its investors.
The entertainment giant’s stock fell about 1% in post-close trading.
Disney has also communicated a number of subscribers to its streaming platform in the United States below expectations.
Returning to the group’s leadership, Bob Iger faces a range of challenges, from declining TV ratings to movie theaters still not filling to pre-COVID levels.
He spoke in a press release of the “unprecedented transformation” that Disney is going through, where a restructuring has been implemented to help the giant gain in efficiency and creativity.
“In the eight months since my return, these significant changes are creating a more cost effective and coordinated approach to our operations,” said Bob Iger.
“This puts us in a position to exceed our original goal of $5.5 billion in savings,” added the chief executive.
Over the April-June period, Disney reduced the loss of its “streaming” division to $512 million, which was in the red by around $1 billion in the same period last year.
Some 800,000 new customers subscribed to Disney+ during the second quarter, a number, however, lower than analysts’ estimates which averaged 900,000.
The group reported quarterly revenue of $22.33 billion, up 4% year-on-year, but below Wall Street consensus ($22.5 billion) according to Refinitiv data. .
Its diluted earnings per share were $1.03, an amount exceeding analysts’ expectations.
The group’s traditional television channels continue to see their turnover and operating margins decline. The TV division recorded over the April-June period a result down 7% to 6.7 billion dollars.
Disney posted an operating loss of $243 million for its “content and licensing” division, which includes television and film sales, against $27 million a year ago, despite the theatrical release of the third installment of the “Guardians of the Galaxy” series.
As for the amusement parks division, quarterly revenue increased by 13% to 8.3 billion dollars, with an operating margin up 11% to 2.4 billion dollars, thanks in particular to the Shanghai Disney Resort, open for the entire quarter – a first since the COVID crisis.
(Report Dawn Chmielewski, with Chavi Mehta and Aditya Soni in Bangalore; Jean Terzian)
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