Disney CEO Bob Iger says company is looking to cut costs by $7.5 billion

Disney CEO Bob Iger is looking to further trim costs at the entertainment giant.

He and the company said Wednesday afternoon that it has "increased our annualized efficiency target to $7.5 billion" while continuing to "aggressively manage" its cost base.

Disney had said in February it wanted to save $5.5 billion across the company. With the new cost-reduction goal, that means $2 billion more in costs will get trimmed. 

The entertainment giant announced the new cost-savings target while disclosing its fourth-quarter results in the late afternoon.

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Disney is "on track" to achieve the new savings, Iger said during the earnings call.

He added that the "thorough restructuring" it has been engaged in "has enabled tremendous efficiency." Earlier in the year, the company moved to have just entertainment, sports and experiences segments and slashed thousands from its headcount, among other measures.

Disney said Wednesday its fourth-quarter revenue came in at $21.24 billion and its net income hit $246 million. Those figures represented 5.4% and 62.9% increases year-over-year, respectively.

In the entertainment segment, the company saw overall quarterly revenues lift 2%, posting $9.5 billion. 

The sports segment where ESPN falls brought in $3.91 billion, according to Disney.

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Its direct-to-consumer streaming services — Disney+, Disney+ Hotstar and Hulu in entertainment and ESPN+ in sports — collectively produced $5.55 billion in revenues in the fourth quarter while their operating loss became $387 million, shrinking an eye-popping amount. 

"We remain confident we will achieve profitability in Q4 of fiscal 2024," Iger said of Disney’s direct-to-consumer services.

The company reported the revenues of its experiences segment were $8.16 billion. That marked a 13% boost from the $7.25 billion it posted in the same three-month period the prior year

"Our results this quarter are a testament to the work we’ve done across the company this past year," Iger said on the call. "And I’m bullish about the opportunities we have to create lasting growth and shareholder value and to strengthen Disney’s position as the world’s leading entertainment company."

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Disney’s value in terms of market capitalization was $154.62 billion as of Wednesday afternoon.

Iger has been back as CEO at the entertainment giant for nearly a year. In July, the company upped the length of his contract, making it run two years longer until the end of 2026.