Disney shares climb to a 1yr high after Iger initiatives
The move came after fiscal Q1 earnings were accompanied by a series of initiatives aimed at combatting activist investors.
Earnings were mixed, while EPS came in better-than-expected, at $1.22 per share, revenue missed expectations at $23.5Bln. The Disney+ streaming service shed 1.3 million subscribers, nearly double the loss forecast by analysts who had anticipated growth across all three segments - entertainment, experience, and sports. But revenue for the Entertainment segment dropped 7%. But investors were pleased with a $3 billion share repurchase program for the current fiscal year and a 50% increase in dividends of 45 cents a share.
There were other announcements too. Disney enters the world of gaming by taking a $1.5 billion stake in Epic Games. The two companies will work together to create a "huge Disney universe" where consumers will be able to interact with characters and stories from Disney, Pixar, Marvel, Star Wars and Avatar. CEO Bob Iger also unveiled details about the streaming launch of the ESPN sports network, to be bundled with Disney+ and Hulu and is likely to launch in August 2025. This comes alongside the announcement earlier in the week that Disney would form a joint venture with Fox and Warner Bros Discovery to launch a streaming sports service. The aim of these announcements was to hit back at detractors. Disney has been under pressure from activist investor Nelson Peltz, who, with former Disney executive Jay Rasulo, want to join the company's board.
(AI Video Summary)
Disney shares
Disney shares reached their highest level in almost a year after the company released its financial results. While earnings per share beat expectations, revenues were lower than anticipated. The Disney Plus streaming service also lost more subscribers than predicted. However, there were positive announcements, such as a $3 billion share repurchase program and an increased dividend. Disney also made a move into the gaming industry by investing $1.5 billion in Epic Games to create a new Disney universe. The launch of the ESPN sports network on the streaming platform also contributed to a positive outlook.
Bob Iger
Despite some criticism from investors, Disney's CEO, Bob Iger, defended the company's agenda. The share price saw significant gains, reaching levels not seen since the previous year. The return of Iger to the company in November 2022 is expected to further boost the share price, as he has implemented various initiatives to restore Disney's position as a major entertainment player. The stock closed with a 7.6% margin, indicating a strong start when the markets open the next day.
For someone unfamiliar with trading, this means that Disney's stock price rose because the company's earnings per share were better than expected, even though its overall revenues were lower. The streaming service Disney Plus did lose more subscribers than predicted, but there were other positive developments, such as Disney acquiring a stake in a gaming company and launching a sports network on their streaming platform. The CEO of Disney responded to criticism from investors and the stock price saw a significant increase, reaching its highest point in almost a year. It is expected that the CEO's return to the company will further improve the stock performance.
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