Disney’s profits exceed expectations, boosts dividends by 50%

Walt Disney on Wednesday beat Wall Street expectations for its profits, supported by record results for its theme parks and continued cost-cutting efforts, while announcing an investment in Epic Games, the creator of the Fortnite game.

Even before reaching out to investors, the company’s CEO, Bob Iger, said in an interview with CNBC that the company would acquire a $1.5 billion stake in Epic and work with it to create a “massive Disney world.”

According to Reuters, Iger said in a statement, “This represents Disney’s largest entry into the world of games and provides great opportunities for growth and expansion.”

Disney plans an online world where consumers can play, watch, shop and interact with characters and stories from Disney, Pixar, Marvel, Star Wars and Avatar.

Disney shares jumped up to seven percent in after-hours trading.

Disney’s board of directors approved a $3 billion stock buyback program for the current fiscal year, and announced a dividend of 45 cents per share to be paid on July 25 to shareholders of record on July 8. This represents a 50 percent increase from the dividend paid in January.

The company reported earnings of $1.22 per share, excluding some items, exceeding analysts’ average earnings expectations of 99 cents per share for the period from October to December.

Disney said it reduced costs by $500 million in its business during this quarter, and that it is on track to save $7.5 billion or more by the end of the current fiscal year.