Walt Disney Co. reduced the losses of its unit of streaming multimedia by more than 400 million dollars compared to the previous quarter, the company reported on Wednesday, which presented earnings in line with the expectations of Wall Street.
Shares of the company were down 2.6% at $98.45 in after-hours trading.
An increase in prices and a reduction in marketing expenses helped improve the results of the unit of streaming, which closed the January-March quarter with an operating loss of $659 million. In the prior quarter, the division lost $1.1 billion.
Overall, diluted earnings per share came in at 93 cents, meeting the consensus forecast of analysts surveyed by Refinitiv. Revenue reached $21.82 billion, slightly above analyst forecasts of $21.79 billion.
The company’s theme parks continued to receive visitors, with growth in Shanghai Disney Resort, Disney Land Paris and Hong Kong Disneyland Resorthelping to increase the unit’s operating income 23% over the prior year to $2.2 billion.
“We are pleased with our accomplishments this quarter, including the improved financial results of our streaming business, which reflect the strategic changes we have been making across the company to realign Disney for sustained growth and success,” said the Chief Executive Bob Iger in a statement.
The total number of subscribers to the flagship Disney+ service decreased by 4 million compared to the previous quarter, to 157.8 million.
Most of the decreases occurred in the offer Disney+ Hot Star in India, after losing the rights to broadcast cricket matches in the Indian Premier League. Disney it also lost 300,000 customers in the United States and Canada, where it raised prices last December.
Chief Financial Officer Christine McCarthy had warned in February that the company was expecting “modestly higher” write-offs due to higher prices.
Wall Street has been pressuring media companies to profit from the billions of dollars they have invested in streaming in recent years to compete with netflix inc.
Iger, who came out of retirement in November to meet the company’s challenges, announced a revamp in February that included a promise to eliminate $5.5 billion in costs, in part by cutting 7,000 jobs.
While Disney tries to develop streaming, its traditional television business is facing obstacles. The networks’ operating income fell 35% from a year earlier to $1.8 billion, in part due to increased sports programming and production costs related to the college football playoffs and the nfl in ESPNand lower advertising revenue on ABC and on the television networks it owns.
