Disney’s earnings in the fourth quarter beat expectations on Wednesday after the company increased its annual cost-cutting target to $7.5 billion. The company set its cost-cutting goal to $5.5 billion in February. This also includes an annualized cut of $4.5 billion to content spending, which was up from $3 billion.
Disney’s shares climbed 3% following the results in after-hours trading.
Apart from that, Disney’s performance in streaming also came in stronger than expected. There were 7 million net additions of core Disney+, as compared to consensus calls of 2.6 million. Furthermore, the better performance of Disney’s stock is also a consequence of Disney’s official reveal of its CFO and its commitment to purchase 33% of Hulu from Comcast.
According to Yahoo Finance,
“Streaming losses narrowed to $387 million from a loss of $1.41 billion in the prior year period after the company raised streaming prices for the second time this year, upping the monthly price of its ad-free Disney+ and Hulu plans by more than 20%. Analysts polled by Bloomberg had expected direct-to-consumer losses to mount to $454 million in the quarter.”
Furthermore, Disney also reported a loss of $512 million in the third quarter, a loss of $659 million in the second quarter, and a loss of $1.1 billion in the first quarter.
As per earnings, Disney stated that it expects a free cash flow to expand to $8 billion in 2024 (full-year), as there shall be lower spending on content. Next year, Disney expects to spend $25 billion, which is less than what it spent in 2023 ($27 billion). It also said that by the end of the calendar year, it will recommend a dividend.