Disney will slash spending by $2 billion to profit from streaming.

Disney experienced a decline in ad income, but its earnings from ESPN+ and theme park expansion exceeded projections.

Disney said it would maintain its “aggressive management” of its cost base and eliminate $2 billion more to reach its $7.5 billion objective.

The stock climbed almost 4% on Wednesday after the bell.

Disney’s ABC Network and other TV stations drove the quarter’s political advertising revenue fall. CEO Bob Iger hinted at selling TV assets this summer.

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Disney+ added 7 million core members in the previous quarter, bringing its total user count, including Hotstar, to 150.2 million. The streaming industry lost less last year.

Wall Street expected Disney to report 148.15 million members quarterly. The business added big streaming films like “Ahsoka” to its repertoire in the prior quarter, along with theatrical releases of “Elemental,” “Little Mermaid,” and “Guardians of the Galaxy: Vol. 3.”

The company expects Q4 2024 integrated streaming revenue.

“Achieving significant and sustained profitability in our streaming business, transforming ESPN into the leading digital sports platform, enhancing the output and economics of our film studios, and accelerating growth in our parks and experiences business are the four key building opportunities that will be central to our success going forward,” Bob Iger, our CEO, said in a release on Wednesday.

Key Disney analysis numbers:

LSEG, previously Refinitiv, beat projections of 70 cents per share with an adjusted EPS of 82 cents.
LSEG predicted $21.33 billion; revenue: $21.24 billion.
Disney+ has 150.2 million subscribers, and StreetAccount has 148.15 million.

The company earned $264 million, or 14 cents per share, in the fourth quarter as of September 30. Net income increased from $162 million, or 9 cents per share, last year.

After impairments, the company earned 82 cents per share, above Wall Street’s 70 cent projection.

Revenue rose 5% to $21.24 billion, below expectations of $21.33 billion. Disney’s profits haven’t dropped since 2018.

Disney has sports, entertainment, and experiences. The company also disclosed its new financial reporting approach this quarter. Sports include ESPN, experiences include Disney’s theme parks, hotels, cruise lines, and retail outlets, and entertainment includes all media and streaming firms.

Disney’s experience segment’s quarterly sales rose 13% to $8.16 billion. Increased park attendance and local and international ticket pricing drove this growth. The business says the Florida resort offers cheaper hotel pricing despite higher operating costs. Parks generated two-thirds of this division’s revenue.