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Walt Disney sharply outperformed Wall Street’s quarterly earnings estimates on Wednesday, with results buoyed by the strong holiday box office performance of animated sequel Moana 2 and higher profits at the company’s streaming business.
The strength in entertainment helped offset a decline at Disney’s domestic theme parks, which were impacted by hurricanes Helene and Milton in Florida. The parks-led Experiences group also incurred about $75m in expenses associated with the December launch of the Disney Treasure cruise ship.
Revenue for the quarter rose 5% to $24.69bn, slightly ahead of analysts’ projections of $24.62bn. Operating income rose 31% from a year earlier to $5.1bn.
“Overall, this quarter proved to be a strong start to the fiscal year, and we remain confident in our strategy for continued growth,” said Disney CEO Bob Iger in a statement.
The company said it would incur $50m in costs associated with exiting its Venu Sports joint venture with Warner Bros Discovery and Fox. The media companies abandoned their plans for a sports streaming service in January, after it ran into substantial legal opposition.
Operating income at Disney’s Entertainment unit, which includes film, television and streaming, increased to $1.7bn in the quarter, nearly double the results from a year earlier, thanks in part to the strong performance of Moana 2.
The animated sequel topped $1bn in box office proceeds over the Martin Luther King Jr Day weekend in January, becoming the fourth Walt Disney Animation film to reach that financial milestone.
Disney’s traditional television business continued to erode. Operating income at so-called linear networks fell 11% to $1.1bn.
Subscribers for the company’s flagship streaming video service, Disney+, slipped 1% from the prior quarter to 124.6 million. The company had warned of a modest drop in subscribers because of a price increase that took effect in October. It also forecast a modest decline in Disney+ subscribers in the second quarter, compared to the first.
Disney+, Hulu and ESPN+ produced an operating profit of $293m in the quarter, marking the third straight quarter of profitability and a turnaround from the year-ago loss of $138m.
In the Experiences segment, which includes consumer products and the cruise line, as well as parks, operating income was roughly flat at $3.1bn. Profit declined 5% at domestic parks because the hurricanes and cruise ship costs, while operating income at international parks rose 28% from a year ago.
At the Sports unit, which includes the ESPN network and Star India business, operating income was $247m, compared with a year-ago loss, in part reflecting improvement in Star India’s operating results ahead of Disney and Reliance Industries completing a deal to combine their Indian media assets.
