Disney (NYSE: DIS) reported its first quarterly earnings since CEO Bob Iger returned as head of the entertainment giant, beating expectations on both top and bottom lines.
The company reported earnings of $0.99 per share for its first fiscal quarter and revenue of $23.51 billion, both topping analyst expectations as growth in its theme parks sales offsetting weakness in its TV and direct-to-consumer units.
On top of Disney's earnings report, Iger announced that the company is seeking to make a "significant transformation" of its business by beefing up its creative content while introducing cost-cutting measures as streaming becomes a top priority.
As part of that transition, Disney is cutting 7,000 jobs, or about 3% of its roughly 220,000 global workforce, and slashing $5.5 billion in costs. The media giant will also now be made up of three divisions: Disney Entertainment, which include most of its streaming and media business; ESPN, which includes the TV network and its ESPN+ streaming offering; and Parks, Experiences and Products.
"We believe the work we are doing to reshape our company around creativity, while reducing expenses, will lead to sustained growth and profitability for our streaming business, better positions us to weather future disruption and global economic challenges, and deliver value to our shareholders," Iger said in a statement.
The streaming space has become more competitive in recent years, with leaders like Netflix (NASDAQ: NFLX) and Disney losing some ground to other players like Amazon (NASDAQ: AMZN) Prime, Apple TV+ (NASDAQ: AAPL), Peacock (NASDAQ: CMCSA) and Paramount+ (NASDAQ: PARA).
In its recent quarter, Disney lost about 2.5 million Disney+ subscribers, likely due to recent price increases and market content saturation. However, the company had expected to lose more than 3 million subscribers.
Notably, Disney plans to focus more on family-friendly franchises, with Iger commenting that "everything is on the table" when it comes to the company's more adult-oriented Hulu streaming platform. Disney currently holds a two-thirds stake in the platform, with Comcast owning the rest.
The company has been expected to but the rest of Comcast's holdings as early as January 2024, but now plans have been officially disclosed.
"We are intent on reducing our debt," Iger toldCNBC in an interview on Thursday. "I've talked about general entertainment being undifferentiated. I'm not going to speculate if we're a buyer or a seller of it. But I'm concerned about undifferentiated general entertainment. We're going to look at it very objectively."