The Walt Disney Company (NYSE:DIS) reported adjusted earnings of 99 cents per share for the first quarter of fiscal 2023. This was better than the Consensus Estimate by 43.48%, but it was down 6.6% from the same time last year. Disney stock rose 6% after the results were announced on February 8 after the bell.

Revenues went up 7.8% from the previous year to $23.51 billion, which was 0.76 percentage points more than what was expected.

Segment Details

Media and Entertainment Distribution sales (which make up 62.8% of total sales) went up 1.3% from last year to $14.78 billion.

Linear Networks’ sales dropped by 5.4% from last year to $7.29 billion.

Direct-to-Consumer sales grew by 13.2% from one year to the next, reaching $5.31 billion.

Content Sales/Licensing and Other Revenues went up 1.1% year over year to $2.46 billion.

The sales from Parks, Experiences, and Products, which make up 37.2% of total sales, went up 20.8% from last year to $8.74 billion. Domestic sales were $6.07 billion, which was a 26.5% increase from the year before. In the reported quarter, international sales rose by 27.1% from the same time last year to $1.09 billion.

Comcast (NASDAQ:CMCSA), which is Disney’s closest competitor, said that its Theme Park business did well in the fourth quarter of 2022.

Comcast’s Theme Parks sales went up 12% from the previous year to $2.11 billion. This is because more people went to Comcast’s parks in the US and Japan and spent more money there.

The revenue from Disney’s Consumer Products, on the other hand, went down by 0.2% from the previous year to $1.57 billion.

Information About Disney+ Subscribers

At the end of the first quarter of the fiscal year, ESPN+ had 24.9 million paid subscribers. This was up from 24.3 million at the end of the previous quarter.

On October 1, 2022, there were 164.2 million paid subscribers to Disney+. As of December 31, 2022, there were 161.8 million paid subscribers.

At the end of the quarter, Disney’s Hulu had 48 million paid subscribers, up from 47.2 million in the same quarter last year.

ESPN+ made an average of $5.53 per paid subscriber each month, which is 14% more than it did a year ago.

Disney+ made an average of $3.93 per paid subscriber each month, which is 1% more than the same time last year.

Disney’s Hulu SVOD-only service brought in an average of $12.46 per paid subscriber per month, which is 2% more than the same time last year.

Disney’s Hulu Live TV + SVOD service brought in an average of $87.90 per paid subscriber per month, up 1% from the same quarter last year.

Operating Details

In the reported quarter, costs and expenses went up 9.7% from the same time last year to $21.52 billion.

Segment operating income was $3.04 billion, which was 6.6% less than the same time last year.

The operating loss for Media and Entertainment Distribution was $10 million.

Operating income for Linear Networks fell by 16.3% to $1.26 billion.

The Direct-to-Consumer operating loss was $1.05 billion, which was more than the $593 million loss in the same quarter last year.

Operating losses in Content Sales/Licensing and Other were $212 million, compared to an operating loss of $98 million in the same quarter last year.

Operating income for Parks, Experiences, and Products was $3.05 billion, which was up 24.6% from the previous year.

The operating income for the Domestic segment was $2.11 billion, which was up 35.9% from the year before. The International segment made $79 million in operating income, which is more than the $21 million it made in the same quarter last year.

The operating profit for Consumer Products went down by 1.5% from last year to $861 million.

Balance Sheet

On Dec. 31, 2022, Disney had $8.47 billion in cash and cash equivalents. On Oct. 1, 2022, it had $11.62 billion in cash and cash equivalents.

As of December 31, 2022, the total amount borrowed was $48.38 billion. This was up from $48.37 billion on October 1, 2022.

In the reported quarter, free cash flow was $2.16 billion. In the previous quarter, it was only $1.38 billion.

Outlook

Disney plans to cut its non-content-related costs by about $2.5 billion a year. It also expects to save $3 billion a year on content that isn’t related to sprts. Over the next few years, the management thinks that the company will save a total of $5.5 billion on costs.

Disney thinks that segment operating income will grow by a high single-digit percentage in 2023.

In the past year, Disney stock has lost 24.1%, which is more than the 22.2% drop in the Consumer Discretionary sector.

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