BAY HILL, Fla. – The Walt Disney Company topped Wall Street expectations in its first full financial quarter since the return of CEO Robert Iger. Nevertheless, the company is planning a new restructuring effort and 7,000 layoffs.
Disney said Wednesday revenue for the quarter ending Dec. 31 grew 8% to $23.51 billion, compared to $21.82 billion a year earlier. Analysts were expecting slightly less revenue — $23.44 billion.
The parks, experiences and products division buoyed revenue for the quarter, bringing in $8.74 billion, up 21% from 2021.
Disney attributes the growth to increases in attendance, occupied room nights and passenger cruise days, particularly through the domestic theme parks and experiences. Disney said it also saw growth at Disneyland Paris.
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“The theme park performance was up considerably, so they seem to be doing OK,” said Duncan Dickson, a retired professor of theme park management.
Still, Iger is looking at trying to save money as it struggles with the performance of its entertainment division and falling subscriptions at Disney+.
“The market’s changing,” Dickson said. “We had to change going into COVID. Now that we’re coming out of COVID, we have to change.”
The company said Disney+ ended the quarter with 161.8 million subscribers, down 1% since Oct. 1.
Iger announced plans for $5.5 billion in cost savings, including laying off 7,000 employees from the global workforce.
Disney employs 220,000 people worldwide.
“Three percent of the global is 7,000, but my guess is theme parks won’t see much of that,” Dickson said. “Most of that will be absorbed in theater, movie and streaming areas.”
He also wants to restructure Disney’s divisions to give ESPN its own unit. The new company organization would consist of three divisions: entertainment (encompassing all movie, TV and internet offerings), Disney parks, experiences and products, and ESPN.
Iger said it was necessary to deal with the challenges the company is facing in the current environment.
Dickson said Iger is trying to refute a number of things Chapek did while CEO of the company to try and regain the confidence of the shareholders.
“Under Chapek, the stock price dropped considerably and he’s trying to get it back up,” Dickson said. “They want to go to a $20 an hour wage today, but Disney would rather do that incrementally.”
Information from the Associated Press was used in this report.
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