(Boursier.com) — waltz disney drops 5% before trading on Wall Street. The American entertainment giant did not really convince last night with its latest figures. The group’s revenues grew with the strength of the theme park business, but the number of streaming subscribers declined. Note, however, that streaming losses have been reduced with the increase in subscription prices. The trend may not be sustainable, as Disney sees increased losses in this segment with marketing costs. Management thus forecasts a widening of streaming losses of 100 million dollars over the period started. For the quarter ended early April 2023, the group reported total revenue up 13% to $21.8 billion. Adjusted earnings per share were 93 cents. The consensus was precisely 93 cents of adjusted EPS, for 21.78 billion in revenue.
The company’s resorts and consumer products unit increased profits 23% to $2.17 billion, driven in part by the return to profitability of international theme parks. Profits from Disney’s traditional TV business, including cable networks ESPN and ABC’s broadcast business, fell 35% to $1.83 billion, due to higher sports programming costs and a reduction in advertising.
Paid Disney+ subscriptions fell to 157.8 million – down 4 million sequentially – from a consensus of 163 million. This is the second consecutive quarter of decline in the number of subscribers. Disney introduced a new ad-supported offer for Disney+ in December and raised the price of the ad-free version by 38% to $11 per month. Chief executive Bob Iger said the Burbank firm plans to raise the price of the ad-free service further during the year. Disney will also remove movies and shows from its services to cut costs, resulting in fees of up to $1.8 billion. Iger plans to combine Hulu and Disney+ content on a single app later in 2023. According to Bloomberg, this suggests the company will eventually buy a third-party stake from Comcast in Hulu. The two firms have an agreement for Disney to buy the stake starting next year in a deal valuing Hulu at a minimum of $27.5 billion.
Rising subscription prices and cost control helped the streaming division reduce its operating loss to $659 million in the second quarter of 2023, from $1.1 billion in the previous quarter.
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