Disney posts first streaming profit despite weaker theme park performance
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The news: Disney’s streaming business has reported its first profit ahead of schedule, despite a soft performance in its theme park business due to waning demand at Disneyland Paris as a result of the Olympics.
The numbers: The Burbank, California-headquartered entertainment giant reported revenue of USD23.2 billion ($35.57 billion) for the June quarter, up on the USD22.3 billion booked in the same period last year.
Earnings rose to USD1.43 a share from the USD0.25 a share loss booked the same period last year.
Disney’s combined streaming business, which includes the Disney+ streaming platform and ESPN+, reported operating income of USD47 million, compared to a USD512 million loss for the same period last year.
The company said it expects streaming profitability to continue into the fourth quarter.
Disney shares on the Nasdaq fell 4.46% during the trading day and then a further 0.65% drop during after hours trading.
The context: Disney has been under sustained pressure from Wall Street to deliver streaming profitability. However, Thursday’s result was shaded by a weaker performance in the company’s theme parks business, which reported a 3% fall in operating income.
The company said it expects the fall to continue into the next quarter, a trend driven by cyclical softening in China, and lower than normal consumer travel due to the Paris Olympics.
What they said: “Our performance in Q3 demonstrates the progress we’ve made against our four strategic priorities across our creative studios, streaming, sports and experiences businesses,” CEO Robert A. Iger said in a statement.
“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], as we achieved profitability across our combined streaming businesses for the first time and a quarter ahead of our previous guidance.
“Despite softer third quarter performance in our experiences segment, adjusted EPS [earnings per share] for the company was up 35%, and with our complementary and balanced portfolio of businesses, we are confident in our ability to continue driving earnings growth through our collection of unique and powerful assets.”
The source: Disney earnings release
