Disney We reported results for the third quarter on Wednesday – exceeding expectations, but posting revenues that are shy and outstripped in analyst forecasts – the company’s streaming business has grown, and its theme parks have spent more from consumers.
CFO Hugh Johnston has been praised in part for the success of Disney’s streaming unit, pinned to flagship service Disney+.
“As a reminder, it was only a few years ago that I lost a quarter of that business,” Johnston told CNBC’s “Squawk Box” on Wednesday. “It was trading purely on submarines, not financial results. We now have a really solid foundation.”
The growth of streaming has recently begun to help replace the loss of the traditional television business of cash cows that have been bleeding customers for years.
Disney shares fell 2% on Wednesday in reserve competition trading.
According to LSEG, Disney reported the following for the quarter ended June 28th, compared to what Wall Street had predicted:
Earnings per share: $1.61 adjusted vs. $1.47 forecast: $236.5 billion vs. $23.733 billion
Quarterly net income was twice as much as $2.62 billion reported in the same period last year, or $2.92 per share, or $1.43 or more. When Disney adjusted for one-off items related to tax incentives related to the purchase of Comcast’s Hulu shares, Disney reported earnings per share of $1.61.
Disney’s total revenue rose 2% to $23.65 billion, causing a loss of expectations from analysts for the first time since May 2024.
The company reported on continued growth in its streaming business despite its heading towards traditional television bundles struggling with customer decline.
Disney increased its guidance for 2025 on Wednesday, but is currently expected to have a $5.85 adjusted EPS (an increase of 18% from 2024).
Streaming, Parks, ESPN Results
Statues of Walt Disney and Mickey Mouse will be in the garden in front of Cinderella Castle at Magic Kingdom Park at Walt Disney World on April 3, 2025 in Orlando, Florida.
Gary Harshawn | Corbis News | Getty Images
Revenue for Disney’s experience segment, including theme parks, resorts, cruises and consumer products, rose 8% to $90.9 billion. In particular, domestic theme park revenues increased 10% to $6.4 billion. Expenses at theme parks increased, with passenger cruise days and resort stays rising in large numbers.
Johnston told “Scoebox” Wednesday that Walt Disney World had the “largest” third quarter to date, adding that traffic in Orlando, Florida is solid.
“I know there are a lot of concerns about US consumers right now. We haven’t seen that. Our consumers are doing very well,” he said.
International Parks and Experience revenues increased by 6% to around $1.7 billion. In May, Disney announced that it had reached a contract to rely on the theme park and Abu Dhabi. The expansion into the United Arab Emirates is not part of Disney’s previous pledge to spend $60 billion on theme parks over the next decade.
Meanwhile, revenues for Disney’s entertainment segment, including traditional television networks, consumer streaming and films, rose 1% to $10.7 billion.
Revenues for the consumer streaming business increased by 6% to $6.18 billion, while the overall entertainment segment fell in the traditional television business.
However, the consumer streaming business was lifted by its flagship service, Disney+, with 1.8 million subscribers added, bringing the total to nearly 128 million. Hulu’s total subscribers increased by 1% to 55.5 million.
The atmosphere of the Disney Bundle celebrating National Streaming Day in Los Angeles queues on May 19, 2022.
Presley Anne | Getty Images Entertainment | Getty Images
The company said it expects a slight increase in Disney+ subscribers in the fourth quarter compared to the third quarter. Total Disney+ and Hulu subscriptions are expected to increase over 10 million people over the current period.
Disney has also raised its operating profit expectations for consumer streaming to $1.3 billion in fiscal year 2025.
ESPN’s domestic revenue rose 1% to $3.93 billion, while domestic operating profit fell 7% to $1.010 billion. These results were affected by increased programming and production costs, particularly due to NBA and university sports rights.
ESPN on Tuesday announced its contract with the NFL, where the Pro Football League will take a 10% stake in the company.
Also, separately on Wednesday, ESPN announced that upcoming full-service streaming apps will be released on August 21st, with WWE Live Events coming to the app, and in some cases linear ESPN networks.
Johnston said he hopes the new streaming service will “drive overall revenue growth.”
The traditional television business has once again dragged its entertainment units. Total operating profit for linear networks, including television channels such as broadcasters ABC and FX, fell 28% to $697 million, affected by a decline in advertising revenue due to lower viewership and prices.
Not yet from Disney and Pixar animated film Elio.
Disney
The Disney theatre unit, which consists of content sales and licenses, suffered a tough comparison to the previous year’s period when “Inside Out 2” was seen to be released. The Pixar film was the best-selling animated film ever, surpassing Disney’s “Frozen II.”
The division reported an operating loss of $21 million over the last period, compared to operating profit of $254 million in the same period last year.
The unit’s revenue rose 7% to $2.26 billion as Disney released Elio, Thunderbolts* and Lilo & Stitch. The original animated film “Elio” set a record low for Pixar Animation Studio, winning ticket sales of just $21 million in its first three days at the theater.
– Robert Ham of CNBC contributed to this report.
Disclosure: Comcast is the parent company of CNBC.
Correction: This story was updated to correct Disney’s increase operating profit expectations for consumer streaming to $1.3 billion for fiscal year 2025.
