Streaming Gains Offset Traditional TV Decline
Disney exceeded Wall Street expectations on adjusted earnings per share but fell slightly short on revenue for its fiscal third quarter. The company reported adjusted EPS of $1.61, surpassing the projected $1.47, while revenue came in at $23.65 billion, just under the $23.73 billion estimate. Net income rose to $5.26 billion, more than doubling from the previous year.
Streaming growth, led by Disney+, was a major contributor to the strong performance. Disney’s direct-to-consumer streaming unit posted a 6% revenue increase to $6.18 billion. Disney+ added 1.8 million subscribers, pushing the total to nearly 128 million. Hulu subscriptions also grew to 55.5 million.
Theme Parks and Experiences Deliver Strong Results
The experiences division saw an 8% revenue jump to $9.09 billion. U.S. theme parks posted a 10% gain to $6.4 billion, fueled by increased spending and higher attendance. CFO Hugh Johnston said Walt Disney World had its best third quarter on record. International parks brought in $1.7 billion, up 6%, supported by cruise volume and resort stays.
Johnston emphasized that concerns over U.S. consumer spending are not reflected in Disney’s data, highlighting solid performance across its domestic experiences portfolio.
Traditional TV Continues to Slide
Despite gains in streaming and parks, Disney’s entertainment segment struggled with a 15% drop in traditional TV revenue to $2.27 billion. Total entertainment revenue rose just 1% to $10.7 billion. Operating income from linear networks like ABC and FX fell 28% to $697 million due to lower ad rates and viewership.
Meanwhile, ESPN reported a modest 1% rise in domestic revenue to $3.93 billion but a 7% decline in operating income. Increased costs tied to NBA and college sports rights pressured margins. ESPN’s new streaming app will launch August 21 and include WWE live events, with Disney projecting long-term earnings growth from the platform.
Outlook and Studio Struggles
Disney raised its full-year adjusted EPS forecast to $5.85, up from $5.75. Operating income for its direct-to-consumer streaming business is now expected to hit $1.3 billion for fiscal 2025. The company anticipates a net increase of over 10 million combined subscribers for Disney+ and Hulu in the current quarter.
Theatrical performance remained weak. Revenue rose 7% to $2.26 billion, but the unit posted a $21 million operating loss. The release of “Elio” marked a low point for Pixar, earning only $21 million in its opening weekend, significantly underperforming last year’s blockbuster “Inside Out 2.”
