The world’s largest entertainment company launched an extensive cost-cutting effort after CEO Bob Iger returned to run the company in November. That included 7,000 job cuts and other reductions in spending.
As part of that effort, Disney recorded $2.44 billion in costs in the third quarter to remove shows and movies from its online services and terminate deals with outside producers, greater than earlier projections. The company also recorded charges of $210 million due to severance costs. In a statement Wednesday, Iger said he expects to exceed the overall cost-cutting target of $5.5 billion.
Disney reported a 23% decline in profit, to $1.89 billion, in traditional TV — underscoring the troubles confronting that division. The business, which includes channels such as ABC and ESPN, has been buffeted by falling cable subscribers, lower broadcast advertising sales and higher programming costs for sports.
Management is also now dealing with strikes by the Writers Guild of America and Screen Actors Guild that have effectively shut down the production of new TV shows and movies across the entire media industry.
The company’s theme-park business, the world’s largest, earned $2.43 billion, an 11% increase from last year. Weakness at the Florida resorts was offset by a huge swing to profitability at the international theme parks.
Subscribers to the Disney+ streaming service tumbled 7.4% to 146.1 million from the previous three months, missing the 154.8 million consensus analysts had expected. Nearly all of that shortfall was borne by the company’s Disney+ Hotstar in Asia. It lost almost 25% of its customers after Disney failed to renew streaming rights for popular cricket games in the Indian Premier League.