By Dawn Chmielewski and Lisa Richwine
LOS ANGELES Walt Disney exceeded Wall Street's earnings expectations on Wednesday as higher attendance at its Shanghai and Hong Kong theme parks offset a decline in advertising revenue at television network ABC.
Shares of the entertainment company rose 1.6% in after-hours trading to $85.84.
The company reported per-share earnings, excluding certain items, of 82 cents in its fiscal fourth quarter ended Sept. 30, topping an average forecast of 70 cents a share, according to LSEG data. Quarterly revenue of $21.2 billion was largely in line with consensus estimates.
The company said it added nearly 7 million Disney+ subscribers in the quarter, with the inclusion of "Guardians of the Galaxy Vol. 3" and the original series "Star Wars: Ahsoka." Disney+ and Disney+ Hotstar together boast 150.2 million subscribers, ahead of Visible Alpha's estimate of 147.4 million.
"Our results this quarter reflect the significant progress we've made over the past year," Disney Chief Executive Bob Iger said in a statement. "While we still have work to do, these efforts have allowed us to move beyond this period of fixing and begin building our businesses again."
Disney now says it is on track to achieve $7.5 billion in annualized savings, as it aggressively manages costs.
The 100-year-old entertainment giant is once again under pressure from activist shareholder Nelson Peltz, whose Trian Fund Management is expected to seek board seats. Trian had pushed for one board seat in January, but ended its proxy fight a month later, after Iger laid out restructuring plans aimed at saving $5.5 billion.
Quarterly losses across the company's streaming services, which also include Hulu and ESPN+, narrowed to $387 million from $1.47 billion a year earlier, due to pricing increases and higher ad revenue. Disney said its streaming business remains on track to reach profitability by September 2024.
Disney's newly named Experiences group, which includes its theme parks and resorts, and cruise lines and consumer products, reported nearly $1.8 billion in operating income in the quarter, up 31% from a year ago. Higher attendance at Shanghai Disney, Hong Kong Disneyland and Disneyland resorts, and growth of the cruise businesses, helped offset lower results at Walt Disney World in Florida.
Disney's Entertainment unit, which includes its television networks, its films studio and its Disney+ and Hulu services, posted operating income of $236 million in the quarter, compared with losses of $608 million a year ago.
ABC network and Disney's owned TV stations reported a drop in advertising revenue amid declining viewership. The summer movie "The Haunted Mansion" underperformed, compared with last year's "Thor: Love and Thunder."
The company's sports business, which includes Disney's ESPN-branded television channels, its ESPN+ streaming service and the Star-branded sports channels in India, reported operating income of $981 million, up 14% from the same period a year ago.
The results reflected lower programming costs, as ESPN walked away from renewing its contract with the Big Ten college football conference. The unit was also helped by a rise in subscription revenue from ESPN+, as the result of a price increase and subscriber gains.
(Reporting by Dawn Chmielewski and Lisa Richwine in Los Angeles; Additional reporting by Chavi Mehta in Bengaluru; Editing by Peter Henderson and Matthew Lewis)