Another thing to keep in mind, some reports are showing that Disney is cutting 3% of their workforce. The parks, which are not expected to take a significant hit, constitute the bulk of the workforce. 7,000 corporate and media jobs is a significant number.
That is a wrap on the call. Disney is expected to provide more info later today about some of the topics addressed in the call.
Disney will be looking at more general entertainment for third parties (Netflix, other networks, etc).
Bob says they will be looking to expand the parks while preserving guest satisfaction.
Bob Iger says that when they grow the parks, they are able to grow the business.
They are increasing the mix to have more infrequent visitors.
Bob says that they increased the lowest priced Disney tickets from 15 days per year to 50 days per year.
Bob says they got a great reaction to the recent parks changes (not charging for resort parking, increase flexibility to park hopping)
"Some of our pricing initiatives were alienating to consumers" - Bob Iger
Disney will not be increasing capacity or become more aggressive on pricing at the parks despite strong demand.
Bob Iger says they need to figure out how to monetize ESPN.
ESPN being broken out does not mean they are looking to spin it off or sell it.
Iger says they also will be more selective in Disney, Marvel, and Star Wars branded content.
Bob Iger says they may have been too aggresive in their promotion for Disney+ in a quest to win subscribers.
Iger: ESPN is going to have to be more selective in selecting rights deals.
Abbott Elementray's average viewer on ABC is in their 60s, while on Hulu it is in their 30s.
They will be taking a more focused approach to general entertainment. This seems to imply that the branded shows and films will not see as much impact.
Disney will be looking at the cost of making their shows and films as well as looking at the volume.
Capital Expenditures will now be $6 billion compared to previous guidance of $6.7 billion driven by less spending on domestic parks.
Disney said that the content cuts will not impact this year.
The Q&A session is nearing
Disney still expects Disney+ to be profitable by the end of the 2024 fiscal year.
$DIS is currently trading north of $121 in after hours trading. That's up by nearly $10 since the closing bell
The Disney+ price increase only saw a modest increase subscriber churn.
Disney reduced holiday guest capacity by 20% compared to the pre-Covid levels.
The non-content cost savings are expected to be 50% marketing, 30% labor, and 20% technology and other costs.
Christine McCarthy starts her comments by saying it is great to have Bob Iger back on the calls.
One of Nelson Peltz's main points was to bring back the dividend.
Disney intends to reinstate the dividend by the end of the year. Initially it will be modest, but they expect to grow it over time.
Sequels of Toy Story, Frozen, and Zootopia are in the works.
Disney expects to continue to limit guest attendance at the parks.
An Avatar experience will be coming to Disneyland
Disney will be using their legacy businesses (i.e. regular television) more to curate content for streaming.
Disney will no longer be providing subscriber numbers. Instead focusing on profitiability.
Disney expects to save $3 billion from content, not including sports.
Disney will cut 7,000 jobs. Iger says that decision was not made lightly.
Disney is looking to cut $5.5 billion in costs.
This new structure is effective immediatly.
Josh will continue to lead parks and Jimmy will continue to lead ESPN.
Alan Bergman and Dana Walden will co-chair Disney Entertainment.
There will be three business segments, Disney Parks Experiences and Products, Disney Entertainment, and ESPN.
He says the new structure will return power to creative forces and hold them accountable. He says the Chapek structure must be destroyed.
He says now it is time for another transformation for Disney.
He is justifying the purchase of 21st Century Fox due to its large library, international reach, and strong managment team.
Bob Iger says it is special to lead Disney during its 100th year.
Here we go
We are now getting score from the Willow series? Is this a good sign for a possible second season?
We should be getting underway any moment now
Today's call is slated to begin in just a few minutes
The current hold music for the earnings call is from Avatar: The Way of Water.
There has been a noted change in tone from Wall Street analysts becoming more pro-Disney and more anti-Peltz.
$DIS is currently up in after hours trading - climbing to around $114 after closing $111.78
It is not being noted by many, but should be, that the loss of subscribers at Disney+ Hotstar were expected as they made a decision not to pay a much higher rights fee for the top cricket league.
The link to today's webcast is now up: https://edge.media-server.com/mmc/p/75g3syq3
Disney capital expenditures at the parks was 738 million for the quarter. This is up from 659 million for the same quarter last year.
The sale of Villages Nature at Disneyland Paris was considered a loss.
The loss of Disney+ subscribers all came from Disney+ Hotstar. Disney+ subscribers in the US and Canada saw minor growth.
Iger: "After a solid first quarter, we are embarking on a significant transformation, one that will maximize the potential of our world-class creative teams and our unparalleled brands and franchises. We believe the work we are doing to reshape our company around creativity, while reducing expenses, will lead to sustained growth and profitability for our streaming business, better position us to weather future disruption and global economic challenges and deliver value for our shareholders."
Disney EPS was .99 vs .78 expected. Revenue was $23.51 billion vs $23.37 billion expected.
Disney+ lost 2.4 million subscribers in the last three months of 2022. The first time they lost subscribers.
Disney stock closed up .15 (.13)% while the DJIA closed down.
While earnings are important, since most of the quarter was before he returned, the big focus will be on the earnings call where Iger is expected to provide more details about his plans.
Getting ready for the major earnings announcement from Disney, the first since Bob Iger has returned as CEO