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Disney CEO Bob Iger told investors that the company’s major problems have been resolved. He said that after a painful year dominated by layoffs and reorganization, the company is now entering a new “era of building.”

Iger said the initiatives have paid off with additional savings and growth in other areas.” He said, “While we still have work to do, …… , but the progress we have made has allowed us to move beyond this recovery period and start building our business again.

Disney has been grappling with a sharp decline in its traditional TV and movie businesses. Last year, the company’s board abruptly recalled Iger, who was retiring, and reappointed him as chief executive as the company was alarmed by the huge losses suffered by its new streaming business, Disney+.

Streaming business losses narrow

The company said that losses in Disney’s streaming business are narrowing. The core streaming service (excluding Hotstar in India) added nearly 7 million subscribers in the three months to September.

Disney CEO Bob Iger Claims Major Problems Have Been Solved

Surprisingly strong earnings helped the company narrow its operating loss to $420 million (£341 million), compared to an operating loss of more than $1.4 billion in the same period last year.

New Hulu experiment

Disney has been making other moves to bolster its online offerings, which also include the sports-focused ESPN+. The company also recently announced that it would go ahead with the acquisition of a third Hulu it doesn’t already own, which offers content for general audiences rather than content aimed at families or children.

The company, which recently raised its prices, will launch a trial combining Hulu and Disney+ programming in a few weeks, Iger said.

Reducing expenses

Iger said the entertainment giant is on track to cut spending by $7.5 billion, about $2 billion above his initial target. The move comes after the company laid off more than 8,000 employees and a Hollywood actors’ strike led to a pause in production.

Shifting focus to quality

Iger blamed part of Disney’s woes on placing too much emphasis on quantity at the expense of quality when trying to expand its streaming services. He said the company is now focusing on producing fewer, better productions, which has helped boost profits and awareness.

Content spending

The company said it expects to spend $25 billion on content over the next 12 months, 40 percent of which will be spent on buying broadcast rights for sporting events. That’s $2 billion less than this year.

Overall revenue growth

For the three months to September, the company’s total revenues increased by 5% to $21.2 billion. That’s a 7 percent increase over the company’s fiscal year that ended Sept. 30th.

The company earned $264 million for the quarter and nearly $2.4 billion (£1.9 billion) for the year. Shares were higher in after-hours trading.

Analyst Outlook

Paul Verna, chief analyst at Insider Intelligence, said, “These results will give CEO Bob Iger some breathing room to move into what he calls the ‘build’ phase.” But, he added, “there are still huge challenges ahead.”

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