Disney beats quarterly revenue estimates, turns streaming profit

Connie Chiume 
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Disney reported Wednesday better revenues than anticipated in the most recent quarter, atop a first profit in its streaming business, while its theme parks came under pressure.
The company saw revenues of $23.2 billion, beating projections of $23.1 billion, while overall profits reached $2.6 billion.
“This was a strong quarter for Disney, driven by excellent results in our Entertainment segment both at the box office and in DTC (direct-to-consumer),” said Disney chief executive officer Bob Iger in a statement.
He added that this came “as we achieved profitability across our combined streaming businesses for the first time and a quarter ahead of our previous guidance.”
Its streaming unit, which includes Disney+, Hulu and ESPN+, reported an operating income of $47 million.
Looking ahead, Disney said it is still “on track for the profitability of our combined streaming businesses to improve” in the fourth quarter.
“We continue to feel optimistic about our trajectory,” the company said.
But the company’s theme parks came under stress in the quarter, with lower operating income domestically.
Disney said it saw “higher costs driven by inflation, increased technology spending and new guest offerings.”
It expects that the third-quarter demand slowdown seen for its US businesses — under the experiences segment — could impact the next few quarters as well.
And its operating income in the upcoming fourth quarter could slip compared with the prior year too.
Disney said it expects its fourth quarter experiences segment operating income to “decline by mid single digits versus the prior year.”
This would reflect a return to normal consumer travel at Disneyland Paris after the Olympics as well, alongside “softening” demand in China.
But its financial results were given a boost from “Inside Out 2,” which became the highest-grossing animated film of all time.
This drove strength in areas like content sales and licensing, as well as Disney+ sign-ups.
The company said it expects Disney+ subscribers to “grow modestly” in the upcoming quarter.
Disney’s results came a day after it announced a hike to its streaming prices.
The company is among media giants shifting towards streaming from more traditional avenues such as broadcast as well as cable television.
Competitors like Netflix and Warner Bros Discovery’s Max also previously unveiled plans to lift costs.
Disney’s shares closed 2.5 percent higher on Tuesday after the announcement, but were down 0.1 percent in pre-market trading.
By Beiyi Seow