Disney CFO Hugh Johnston Talks Rising Shares, Earnings

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So to the earnings and focus on Disney. The company's first quarter earnings topping estimates, fueled by success in its movie studios and streaming business. The stock is positive and joining us Now's the Disney CFO Hugh Johnston. Welcome back to the program sir. We'll talk about how solid these numbers aren't just the moment. There's one headline the least from me. We're talking about a little bit earlier this morning.

Good morning, Jonathan, No, I don't think so at all. Actually, that's really sort of more seasonal decline than anything else. A year over year will will certainly be up, so certainly not concerned from that perspective. More broadly, the streaming business is doing extremely well. This is a business were we invested pretty heavily in a couple of years ago, and what you're seeing now is the benefit of those investments. Our expectation is will continue to grow subs, will improve margins.

Movie side of our entertainment business.

We Wanta to Inside Out to Deadpool, all terrific hits, and on the TV side, the combination of Abbot, Elementary, Showgun and high potential causing viewership to grow. We're seeing higher engagement, We're seeing churn ultimately coming down over the course of this year.

So we feel like.

The streaming business is going to be one of the big drivers for our company going forward.

Here, you know how much I love Showgun and least so I can say love Momana two as well. So the content SLEN is looking pretty good so far. I did want to talk about the cost issue though, and clearly not an issue from you, so I appreciate the explanation. Conversation we've had over the last few days or so is if we get tariffs, can companies pass on the costs. I'd like to know from your perspective and for the company, the additional tarists that have gone onto China, how that

Yeah, right now, based on what's been proposed, And obviously this is a rapidly evolving environment, so we're going to react as we learn things.

The impact would be im material to us.

So from that perspective, really, the Walt Disney Company will be fine based on what's on the table right now.

At the same time, there's a question about the American brand at a time when they're increasing tensions between the US and China, the US and Europe. Given the fact that the experiences side of your business has been such a driver of growth for you, are you concerned Have you seen any pullback in attendance in some of the areas like Shanghai, like France, like Paris? They could potentially have some feelings around the negotiations.

Now, broadly speaking, the international parks business did very well. Profitability was up twenty eight percent for the quarter. Attendance broadly speaking was up, So from that perspective, we certainly feel good. Disneyland Paris actually had a terrific quarter, so freely positive in that regard. Candidly, in many ways, what the Walt Disney Company represents is an opportunity to.

Get away from all of the things that are happening.

In the world right Our job is to basically bring families joy, bring them together, give them smiles. So I think in many ways we're not a part of that conversation at the.

Same time, and it's sort of pulling together the idea of experiences and the smiles and the streaming business, the idea that how much are people willing to pay for this? John was alluding to that with terifs, but just more broadly, how much are you seeing consumers push back against some of the price increases, whether it's at the parks or whether it's at the streaming services, just simply because of how much prices of our already gone up.

Yeah, We're not to be perfectly candid, and I think it's always important to remember from a consumer perspective, prices what you pay, and value is what you get, and if you deliver sufficient value to the consumer, they are willing to pay the price. And I you see that going on broadly with companies these days. Companies that deliver a lot of value they're pricing is being accepted by consumers.

You're speaking of the streaming business. Can we talk about Hulu just a little bit more. Where are we with the negotiations with Comcast and we make it any progress.

We're still in the process and I probably won't kind of go any further than that. I'd expect we'll get some resolution.

Sometimes we'll holding things up few What are the sticking points?

Oh, it's I think just the usual people have different points of view on the value of the assets.

So nothing more than that.

There is a content question here, Hugh, about what the driver of growth is going to be from a streaming perspective, whether it's instrumental and getting involved in some of the sports world, or whether you can kind of lean into existing brands. How you do content creation at a time when there is a lot of question around what exactly sells other than the legacy brands.

Yeah, I think when you look at the Walt Disney Company, in many ways, we're best positioned from the standpoint of streaming because we do generate so much of our own content relative to some of our competitors in many ways. To think about Disney Plus is it really can be the portal into all things Disney and something you might want to have on twenty four hours a day, seven days a week, because if you want news, you'll be

If we were.

Talking six months ago, we might have started the conversation on artificial intelligence and how much you were using that in your content creation at a time where that's increasingly something that's being done. How much have you explored that to lower costs, expedite the process of time to get some of the movies and videos online.

We've got a number of use cases really across the entire company, from the ability to create content, to the ability to manage the company more efficiently, to the ability to manage our guest experiences inside the parks.

And cruise business. So we're in the.

Early days of leveraging all that as our most companies, because we really are very much in the early days of artificial intelligence generally speaking, but we're experimenting a lot to try to understand where can actually best add value to the Walt Disney Company.

You do you see a shift in vibes in this country where the kind of content that people want of view is changing.

Not really, you know, it tends to be I think more more based on age demographics than anything else. But by and large, if you look at what we're able to deliver by virtue of the broad base of IP that we have, we have sort of the very traditional things from the original Walt Disney Company right through to things that come out of Marvel that come out of

Here and you've got to run. We appreciate your time, as always said, thank you. The Disney CFO, Hugh Johnston