Streaming, Studio Gain for Disney...Cable, Parks Off

Disney’s streaming business and studio gained momentum in the September quarter, while its cable and theme park profit engines lost steam, underscoring the diverse set of challenges the entertainment giant faces as it positions itself for the future, reports The Wall Street Journal.

After years of investing heavily in streaming, the company’s direct-to-consumer business swung to a profit of $321 million in the September quarter from a loss of $387 million a year earlier. 

The stark improvement for the business, home to Disney+, Hulu and ESPN+, marked its second consecutive quarterly profit.

• Income from Disney’s traditional TV networks, which include both ABC and cable channels such as FX, the Disney Channel and Freeform, tumbled 38% to $498 million. Revenue fell 6% to $2.5 billion.
• Earnings per share: $1.14 adjusted vs. $1.10 expected
• Revenue: $22.57 billion vs. $22.45 billion expected
• Disney’s net income increased to $460 million, or 25 cents per share, from $264 million, or 14 cents per share, during the same quarter last year. Adjusting for one-time items, including restructuring and impairment charges, Disney reported earnings per share of $1.14. 

Total segment operating income increased 23% to $3.66 billion compared with the same period in 2023:

• Revenue for the entertainment segment – which includes the traditional TV networks,  direct-to-consumer streaming and films – increased 14% year over year to $10.83 billion after a hot summer at the box office.
• Disney Pixar’s “Inside Out 2” became the highest-grossing animated movie of all time this summer, surpassing Disney’s “Frozen II” at the box office. Meanwhile, its “Deadpool & Wolverine” became the highest-grossing R-rated film of all time, surpassing Warner Bros. Discovery’s “Joker.”
• The films added $316 million of profit for the entertainment segment during the quarter. Overall, the entertainment segment reported nearly $1.1 billion in profit.
• Revenue for Disney’s sports segment, made up primarily of ESPN, was flat. ESPN’s profit fell 6% due in part to higher programming costs associated with U.S. college football rights as well as fewer customers in the cable bundle. 
• Disney’s combined streaming business, which includes Disney+, Hulu and ESPN+, saw profitability improve during the quarter after turning its first profit during the fiscal third quarter, three months earlier than expected. The division reported an operating income of $321 million for the September period compared with a loss of $387 million during the same period last year. 

Disney joined its peers, including Warner Bros. Discovery,Netflix,Comcast and Paramount Global in adding streaming subscribers during the most recent quarter.