Shares for entertainment giant Disney fell almost eight percent last week and continue to slide this week as revenues disappointed in the fourth quarter falling short of Wall Street analysts’ expectations. Roughly flat revenues of $22.46 billion are also casting a pall over the latest year of CEO Bob Iger’s second stint.
Operating income fell 5% to $3.48 billion, with failures in the TV and film divisions, even though the amusement parks and streaming posted profits, according to the Wall Street Journal.
The company’s overall revenue was $22.5 billion, less than the same quarter last year, CNBC reported.
The company’s amusement parks and attractions in the U.S. suffered a small 1 percent loss, but revenue still climbed, mostly due to price raises, according to Inside The Magic. Overseas, though, revenue increased by 25 percent.
Hovering between $80 and $125 since 2022, Disney stock has not seen much success, even withe the vaunted return of Disney Chief Executive Bob Iger to the reins.
One of the major worries facing the Mouse House is the continuing changes in the way Americans take in their entertainment and some wonder if Disney can successfully navigate whatever direction that change will take. And Disney’s big budget films bombing at the box office is pulling down economic gains.
With that in mind, Disney is set to spend $24 billion on new content across its sports and entertainment divisions, Variety reported.
That may sound like a lot but that price tag is lower than recent years in which critics claimed that Disney “overproduced” its content. In 2022, for instance
CFO Hugh Johnston noted that the company is also looking to spend even more on local content, saying, “We have rights to succeed with respect to Disney content, but we need to supplement that with local content. So the strategy is very much to do that.”
Disney+, though, has finally started turning in profits, the company said. The streaming service beat Wall Street expectations and brought n 3.5 million new subscribers. In addition, Disney’s acquisition of Hulu brought in another 8.6 million subscribers. Disney’s “entertainment direct-to-consumer streaming revenue increased 8% to $6.25 billion and operating income hit $352 million, up 39%, for the quarter,” Variety added.
“This is a significant achievement when you consider that just three years ago our [streaming] business was running a $4 billion operating loss,” Iger told investors.
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