Cost reduction was a driving factor that allowed Disney to project an increase of at least 20% in profits for the current year.
The actions of Walt Disney Co. ($DIS) soared more than 12% this Thursday on Wall Street, after presenting the earnings report at the close of the previous day, which showed a better performance compared to the last three years. Wolfe Capital analysts praised the company’s ability to adapt. Bob Iger to accelerated change in the industry since its return in late 2022.
Thus, the company positively surprised the market by reporting earnings above expectations in its first fiscal quarter, supported by an optimistic outlook for the year. The company highlighted the benefits of cost reductions and the strong performance of its international theme parks as key drivers of its financial success.
According to the statement issued on Wednesday, earnings reached $1.22 per share, excluding certain items, significantly exceeding the average Wall Street estimate of 99 cents. Although revenues remained virtually unchanged at $23.5 billion, they did not meet the expectations compiled by Bloombergmainly due to the poor performance of the television business and two theatrical failures.
Key to Cedears
Cost reduction was a determining factor that allowed Disney to project an increase of at least 20% in profits for the current year, estimating around US$4.60 per share, exceeding expectations of US$4.27. This positive outlook could strengthen CEO Bob Iger’s position against activist investor Trian Fund Management LP, which has nominated Nelson Peltz and Jay Rasulo to the entertainment company’s board of directors.
In an announcement, Bob Iger announced an investment of $1.5 billion with the goal of allowing consumers Interact with stories and characters from Disney, Marvel, Pixar and Star Wars in Epic’s popular game Fortnite. Recognizing the considerable time that generations Alpha, Z and millennials spend on video games, this strategy seeks to capitalize on the growing relevance of digital entertainment.
Epic CEO Tim Sweeney praised Disney’s long-term vision in uniting their worlds with Fortnite, highlighting the company’s early confidence in the potential of this collaboration. Sweeney noted that Disney uses Epic’s advanced real-time 3D graphics creation tool, Unreal Engine, to carry out this fusion of digital universes.
Source: Ambito
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