Disney profit boosted by Moana 2 but streaming subscribers expected to drop
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,” though the company warned of a modest decline in Disney+ streaming subscribers in the coming quarter.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 $75 million in expenses associated with the December launch of the Disney Treasure cruise ship.Disney reported a 44% jump in adjusted per-share earnings of $1.76 for the October-December quarter, exceeding the $1.45 per-share earnings consensus estimate of 24 analysts surveyed by LSEG.Revenue for the fiscal first quarter rose 5% to $24.69 billion, slightly ahead of analysts’ projections of $24.62 billion.
Operating income rose 31% from a year earlier to $5.1 billion.Shares fell more than 1% in early trading, as investors appeared to react to Disney’s guidance that its flagship Disney+ streaming service would shed a modest number of subscribers in the coming quarter following its recent price increase.That stands in sharp contrast to rival Netflix’s record gains of 19 million subscribers.“Clearly, Netflix won last quarter’s battle in the overall streaming war,” said Forrester research director Mike Proulx.
“While Disney’s (streaming) business posted a modest revenue increase, it was largely driven by price hikes.Price pinching consumers isn’t a long-term growth strategy.”Disney forecast “high single digit” adjusted earnings-per-share growth in fiscal 2025 compared with the prior year and an increase of approximately $875 million in operating income at the streaming entertainment unit.The company said it would incur $50 million in costs associated with exiting its Venu Sports joint venture with Warner Bros Discovery and Fox.
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