(Boursier.com) — Walt Disney recovered by 4% before market on Wall Street, while Bob Iger’s group announced profits above expectations last night. For its fourth fiscal quarter, the American entertainment giant posted adjusted earnings per share of 82 cents compared to a consensus of 69 cents. Revenues improved by 5.4% to $21.2 billion. Margins are increasing with aggressive spending cuts since Iger took over Disney.
The group’s parks generated $1.76 billion in profits over the quarter, 31% more than the previous year, for revenues up 12% to $8.16 billion. Losses in streaming were contained at $387 million, a better performance than expected. The number of paid Disney+ subscribers increased to 150.2 million, compared to 147 million consensus. ESPN posted profits of $981 million, an increase of 14%, for revenues of $3.91 billion without much change. Entertainment networks finally generated 805 million in profits, for revenues down 9% to 2.63 billion.
The group intends to return to distributing dividends by the end of the year. It must be said that Walt Disney is also facing pressure from activist investor Nelson Peltz and his Trian fund, which owns $2.5 billion in securities and wants to obtain several seats on the board of directors.
Walt Diney intends to reduce its spending by an additional $2 billion. He previously pledged to cut $5.5 billion in costs and has already cut about 8,000 jobs this year. Content spending is expected to fall to $25 billion over the current financial year. Disney is also negotiating the sales of certain programs to Netflix, which however excludes Marvel and Star Wars productions, essential for Disney+. Disney will also acquire Comcast’s one-third stake in streaming service Hulu for at least $8.6 billion. The group has finally appointed Hugh Johnston, ex-PepsiCo, as financial director.
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