Disney Rose By 6% Due To Cost Cuts Tied To Hollywood Strike, Saves $3 Billion
by Shahnawaz Alam Business 10 August 2023
Walt Disney Co., the biggest entertainment in the world, has reportedly risen more than 5% in extended trading after their management stated that capital spending and outlays for TV shows and movies they produced were coming in lower than they projected earlier.
The entertainment industry typically projects a content spending of $30 billion and expects a total of $27 billion this year. The acting chief financial officer, Kevin Lansberry, stated this during a Wednesday Call with investors after they posted their third-quarter results. The Burbank, California-based company usually spends $30 billion for content every year.
The savings on their production house are related to the writer and actor strike in Hollywood. Disney sometimes also forecasts company shifts in the timing of some projects. Disney forecasts a lower capital spending of at least $5 billion less than what was initially projected. This is because of their shift in timing for some of the upcoming movies and TV projects.
Because of these comments made, the share of Disney was lifted to as high as $92.80 in extended trading. This completely reversed the decline earlier. Earlier Wednesday, Disney reported their third quarter fiscal profit of $1.03 per share, which beats their 99% average of estimates compiled by Bloomberg.
Disney’s Sales grew up to 3.8% reaching $22.3 billion by the end of the quarter that ended on the first of July. Due to the Hollywood writers and actor strike, Disney saved $3 billion in cost cuts and reportedly rose 6% in trading.