Losses Shrink & Savings Target of $5.5 Billion Exceeded in $22.3 Billion Third Quarter 2023 for The Walt Disney Company

Jonathan D

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Losses Shrink & Savings Target of $5.5 Billion Exceeded in $22.3 Billion Third Quarter 2023 for The Walt Disney Company

According to Deadline and official reports from The Walt Disney Company, a mixed third quarter for 2023 has seen some success, reduced losses, and a few disappointments overall.

The Walt Disney Company Third Quarter 2023

Direct-to-consumer losses shrank while Parks and Resorts revenue rose compared with the previous quarter. While Disneyland Resort and Walt Disney World Resort did not have stand-out performances, the heightened revenue was assisted by the international parks and Disney Cruise Line. Overall, Parks & Resorts are up 13% — 94% internationally and 4% domestically (mostly attributable to Disneyland).

Bob Iger

Disney CEO Bob Iger shared some initial thoughts on the performance:

Our results this quarter are reflective of what we’ve accomplished through the unprecedented transformation we’re undertaking at Disney to restructure the company, improve efficiencies, and restore creativity to the center of our business. In the eight months since my return, these important changes are creating a more costeffective, coordinated, and streamlined approach to our operations that has put us on track to exceed our initial goal of $5.5 billion in savings as well as improved our direct-to-consumer operating income by roughly $1 billion in just three quarters. While there is still more to do, I’m incredibly confident in Disney’s long-term trajectory because of the work we’ve done, the team we now have in place, and because of Disney’s core foundation of creative excellence and popular brands and franchises.

At the time of publishing, Disney stock closed out the day at $87.49 per share, though has risen to $90 after hours. This is about $10 under the stock price increase from the last earnings call back in May.

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The total third quarter company revenue of $22.3 billion is a slight decrease of 2%, slightly shy of forecasts. Disney’s revenues for their direct-to-consumer products — Disney+, Hulu, and ESPN+ — increased by 9 percent to $5.5 billion dollars, though their operating loss nearly broke even. Disney+ subscribers have dropped to 146.1 million, below the 154.8 million goal, though core members of the service rose by 1 percent.

third quarter is first without mccarthy

There has certainly been tumult in the third quarter, with dramatic shifts and disappointing performances at the box office impacting Disney as a whole. CFO Christine McCarthy stepped down from her position while Iger’s public perception was damaged after calling demands from striking actors and writers “not realistic.” This quarter’s earnings call is the first without the former CFO.

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While “Indiana Jones and the Dial of Destiny” and “Haunted Mansion” have not been financially stellar, other films such as “Elemental” have made a surprise comeback — while Iger has also discussed opportunities to “turbocharge” theme park growth.

Rumors continue to circulate that Apple might eventually acquire Disney, though Iger has denied this at various points while also admitting he is considering the sale of various media assets.

Ron DeSantis Nov 22

In Florida, there’s an ongoing legal battle with Florida Governor Ron DeSantis over the governance of the area in which Walt Disney World is located, though Iger and the company are continuing to pursue the matter in court, with the CEO himself stating it is “not our goal to be engaged in a culture war.”

The Walt Disney Company in Q2

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Previously, The Walt Disney Company announced approximately $21.8 billion in revenue during the second quarter of 2023. Their adjusted earnings per share (EPS) was $0.93, a decrease from $1.08 in last year’s quarter. This was for the period of January 1 to April 1, 2023. Disney Parks reported $7.78 billion in revenue during quarter two and Disney+ lost 4 million subscribers (but the financial performance of streaming did improve, as Iger said).

Throughout the second quarter, and continuing until the end of May, Disney completed three major rounds of layoffs in an aim to cut coasts within their media operations.

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CEO Bob Iger has extended his return as leader of the company through 2026 and brought back former colleagues Kevin Mayer and Tom Staggs to advise on television strategy moving forward. In a recent major upheaval of their TV properties, ESPN will now be launching a sportsbook with PENN Entertainment, officially becoming a major player in legal sports betting.

Here’s a selection of major stories from today’s earnings call compiled below:

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  • Jonathan D

    Originally from Los Angeles and Honolulu, Jonathan is a fan of cinema and theme parks who grew up on the original California Disneyland, and nurtures a particular admiration in Orlando for EPCOT and Disney's Animal Kingdom. His favorite resort on Earth would be Disneyland Paris, which doesn't seem to get the full admiration it deserves. You can find him in the Hufflepuff Common Room by the kitchens at jonathan.doughty@wdwnt.com.