The Walt Disney Co. DIS has trimmed its content budget to $23 billion, down from its previous $24 billion allocation, as part of its ongoing cost-cutting efforts — but CFO Hugh Johnston insists that the company remains confident in its earnings outlook.
What Happened: During Disney's first-quarter earnings call, Johnston addressed the company's strategic financial moves, underscoring that cost-cutting is an ongoing process aimed at maximizing efficiency.
“As a company, we’re focused constantly on identifying opportunities where we’re spending money, perhaps less efficiently, and looking for opportunities to do it more efficiently,” Johnston said. “That’s not a once-a-year thing, that’s not a once-a-month thing—that’s something that we do every day of the year.”
Despite reducing content spending by $1 billion, Disney's financial outlook remains strong. The company started the year with over 40% earnings growth in the first quarter, surpassing expectations.
See Also: Bob Iger Thinks Disney Has An Advantage In Streaming Over Netflix, Amazon: Here’s Why
However, Johnston said that while Disney feels “very, very positive” about the rest of the year, it is too soon to revise earnings guidance.
“It certainly gives us confidence—an even higher level of confidence than we probably even had before as we get into the balance of the year,” he said. “At the same time, given the rapidly evolving macro environment, we think it would be premature at this point to change the guidance.”
Johnston also hinted that Disney may exceed expectations if current business momentum continues, saying, “We're certainly not a management team that’s afraid of overdelivering if, in fact, that is where the business takes us.”
Why It Matters: Disney’s fiscal first-quarter revenue rose 5% year-over-year to $24.70 billion, surpassing analyst expectations of $24.62 billion. Adjusted EPS came in at $1.76, beating the forecast of $1.45.
At quarter-end, Disney had 178 million Disney+ Core and Hulu subscriptions. Paid Disney+ Core subscribers totaled 125 million, down 0.7 million from the previous quarter.
The Lion King contributed to $312 million in operating income for Content Sales, Licensing, and Others.
For fiscal 2025, Disney reaffirmed high-single-digit growth in adjusted EPS compared to 2024, while analysts expected $5.41. The company targets approximately $15 billion in operating cash flow.
Price Action: Disney's stock declined 0.22% in after-hours trading, settling at $110.30. Earlier on Wednesday, it closed at $110.54, down 2.44%, according to Benzinga Pro data.
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