(Bloomberg) — Walt Disney Co. reported better-than-expected earnings for its fiscal first quarter and issued an upbeat profit outlook for the year, citing cost-cutting benefits and the strong performance of its international theme parks.
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Earnings rose to $1.22 a share, excluding some items, Disney said Wednesday in a statement. That beat the 99-cent average of Wall Street estimates.
Revenue was little changed at $23.5 billion in the period ended Dec. 30 and fell short of the $23.8 billion average of estimates compiled by Bloomberg, held back by Disney’s struggling TV business and two theatrical misses, The Marvels and Wish.
Thanks to cost cutting, Disney said profit this year will rise at least 20% to about $4.60 a share, topping estimates of $4.27. That could help Chief Executive Officer Bob Iger fend off activist investor Trian Fund Management LP, which has nominated its founder Nelson Peltz and former Disney finance chief Jay Rasulo to the entertainment giant’s board.
In a nod to investors, Burbank, California-based Disney raised its dividend by 50% to 45 cents a share and approved a $3 billion stock repurchase program for the year.
Shares of Disney gained as much as 8.7% to $107.75 in extended trading after the results were announced, their highest in almost a year. The company also announced it’s acquiring a $1.5 billion stake in Epic Games Inc. as part of a collaboration with the company that makes the popular Fornite title.
Read More: Disney Invests $1.5 Billion in Fortnite Maker Epic Games
Subscribers to the Disney+ streaming service fell to 149.6 million in the quarter, missing analysts’ projections of 151.2 million, while overall losses in streaming, including Hulu and ESPN+, shrank to $216 million from $1.05 billion a year ago.
However, the company expects to add as many as 6 million core Disney+ subscribers this period and continues to predict its streaming operation will reach profitability by the fourth quarter of the current fiscal year.
The bright spot for Disney last quarter was its international parks, where profit rose more than fourfold and sales increased 35% from last year, when Covid closures were still in place. That more than countered a more modest 4% gain in revenue at its domestic resorts and a 2% drop in profit, with attendance falling at Walt Disney World in Florida.
Disney’s international parks also benefited from new a Frozen attraction in Hong Kong and Zootopia in Shanghai.
The company’s traditional media businesses continued to struggle, hurt by an accelerating decline in its broadcast and cable TV — led by ABC — and continued losses at the division that includes the film studio. The movie division has registered quarterly losses for most of the past two years.
Revenue from content sales and licensing — including the film studio — fell 38% from a year earlier, while sales at Disney’s domestic TV networks slumped 14% last quarter, worsened by strikes that shut down production in Hollywood.
On Tuesday, Disney announced plans to bundle ESPN content with programming from Fox Corp. and Warner Bros. Discovery Inc. to create a new sports-focused streaming service.
Before that announcement, Trian’s plans for Disney included bundling ESPN’s streaming business with a larger player like Netflix Inc., Bloomberg reported. Trian dropped an effort to seek Disney board seats last year, but renewed its efforts before this year’s annual meeting.
“We saw this movie last year and we didn’t like the ending,” Trian said in a statement.
–With assistance from Crystal Tse.
(Updates with Trian statement in last paragraph.)
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