In its most eye-catching announcement, CEO Bob Iger said the company would take its biggest step yet into gaming with a $1.5 billion stake in Epic Games, the maker of blockbuster Fortnite.
Disney said the partnership will see it work together with Epic to create new games using its intellectual property, including Disney, Pixar, Marvel, Star Wars and Avatar.
The company also said it would launch an ESPN streaming service in 2025; stream an exclusive version of musician Taylor Swift’s Eras Tour movie on Disney+; and release a sequel to hit “Moana” this year.
Taylor Swift performs onstage during “Taylor Swift | The Eras Tour” at Allianz Parque on November 24, 2023 in Sao Paulo, Brazil.
Buda Mendes | Getty Images
Disney’s earnings per share for the first quarter came in at $1.22, versus a forecast of 99 cents, despite revenue missing estimates and remaining roughly flat year-on-year. The company also announced a dividend of 45 cents a share, payable in July, which is 50% higher than its January payout.
Disney lost customers on streaming platform Disney+, but revenue was higher due to a hike in subscription costs. The company also updated investors on its plan to cut costs by at least $7.5 billion by the end of fiscal 2024, and forecast earnings per share for the year of around $4.60.
Walt Disney Company share price.
The results show stable revenue and effective cost management, according to Ben Barringer, technology analyst at investment manager Quilter Cheviot. The Epic Games partnership could prove fruitful but is likely to be a “slow burn,” he said in a note.
“Disney anticipates modest revenue growth while maintaining a focus on cost discipline to ensure returns for shareholders. This strategy will garner support from its activist shareholders, despite ongoing challenges in the Parks business and a continued decline in linear television,” he added.
Disney and Iger have been under pressure from activist investor Nelson Peltz to improve results. Peltz’s investment firm told CNBC in a statement Wednesday: “We saw this movie last year, and we didn’t like the ending.”
— CNBC’s Sarah Whitten and Alex Sherman contributed to this story