Disney profits soar thanks to streaming services and box office success
The combined streaming businesses, which includes Disney+, Hulu and ESPN+, achieved profitability for the first time in the third quarter.
Disney’s profits have beaten Wall Street’s expectations, bolstered by strong results from its streaming service and box office success with Inside Out 2 and Deadpool & Wolverine.
Disney earned 460 million dollars (£363m) for the quarter which ended on September 28. A year earlier the California-based company earned 264 million dollars (£208m).
Shares jumped nearly 10% before the market opened on Thursday.
Revenue climbed 6% to 22.57 billion dollars (£17.8m) but fell a bit short of Wall Street’s estimate of 22.59 billion dollars.
Operating income for the entertainment segment, which includes its movie studio and parts of its television wing, more than quadrupled to 1.07 billion dollars (£0.84bn).
This was helped in part by a strong performance from its content/sales, licensing and other segment, which benefited from 316 million dollars (£249m) in operating income from Inside Out 2 and Deadpool & Wolverine.
The combined streaming businesses, which includes Disney+, Hulu and ESPN+, achieved profitability for the first time in the third quarter.
Disney+ saw a 2% increase in paid subscribers domestically, which includes the US and Canada. It had a 5% rise internationally, which excludes Disney+ HotStar.
Disney ended the quarter with 174 million Disney+ Core and Hulu subscriptions, and more than 120 million Disney+ Core paid subscribers, an increase of 4.4 million over the prior quarter.
Disney said that its improved direct-to-consumer business results were due in part to subscription revenue growth thanks to increases in retail pricing and subscriber growth. Advertising revenue also increased and marketing costs at Disney+ declined.
“This was a pivotal and successful year for The Walt Disney Company, and thanks to the significant progress we’ve made, we have emerged from a period of considerable challenges and disruption well positioned for growth and optimistic about our future,” CEO Bob Iger said.
The Experiences division, which includes six global theme parks, its cruise line, merchandise and videogame licensing, reported operating income dropped 6% to 1.7 billion dollars. While operating income improved at domestic parks and Experiences, it fell for international parks and Experiences.
Disney previously forecast that its fourth-quarter Experiences operating income would fall by mid-single digits compared with the previous year due to domestic parks moderation as well as cyclical softening in China and less people at Disneyland Paris due to the impact the Olympics had on normal consumer travel.
Last month Disney said that it was tapping Morgan Stanley executive James Gorman to serve as its next chairman, beginning early next year. The entertainment giant also announced that it anticipates naming its new CEO in early 2026.
Mr Gorman will become chairman on January 2 2025. He will succeed Mark Parker, who is leaving after serving on Disney’s board for nine years.
Disney is searching for a new CEO to succeed Mr Iger who came back to Disney in 2022 after a period of clashes, missteps and a weakening financial performance at the company under his chosen successor, Bob Chapek.
Mr Gorman said in a statement in October that by naming Disney’s next CEO in 2026, it “will allow ample time for a successful transition before the conclusion of Bob Iger’s contract in December 2026”.
Disney is continuing to review internal and external candidates for the CEO position.
