Disney reported better-than-expected earnings for the fiscal first quarter, despite a decline in Disney+ streaming subscribers. The company’s streaming business remained profitable, even as Disney+ saw a 1% drop in subscribers, bringing the total to 124.6 million. While domestic subscriptions grew by 1%, international numbers fell by around 2%. Disney had warned of a “modest decline” in subscribers for the quarter, and it expects another slight drop in the second quarter.
Disney’s quarterly results for the period ended December 28 beat Wall Street’s expectations. The company posted a net income of $2.64 billion, or $1.40 per share, compared to $2.15 billion, or $1.04 per share, in the same quarter the previous year. Adjusted earnings were $1.76 per share, exceeding the expected $1.45. Revenue grew by 4.8% year-over-year to $24.69 billion, surpassing analyst predictions of $24.62 billion.
The company’s entertainment division saw a 9% revenue increase, reaching $10.87 billion, and operating income surged by 95% to $1.7 billion. This growth was driven by higher content sales and licensing, although Disney’s linear TV business continued to weigh on results. CEO Bob Iger remained optimistic, calling linear TV “an asset” that supports streaming services. He added, “They are not a burden at all. They are actually an asset,” highlighting the integration of traditional networks with streaming content.
Disney’s box-office performance also contributed to the positive results. “Moana 2” helped push the company’s film revenue to new heights, topping $1 billion at the box office. Other hits like Marvel’s “Deadpool & Wolverine” and Pixar’s “Inside Out 2” added to Disney’s dominant performance in 2024.
Disney CFO Hugh Johnston said that the experiences segment performed better than expected for the fiscal quarter. “In fact, the consumer is a bit stronger than we would have expected,” Johnston said Wednesday. “I think what we’re seeing is consumers are just very value focused, and you deliver value to them, they’re willing to pay the price for it.”
Meanwhile, Disney’s experiences division, which includes theme parks and resorts, saw a 3% revenue rise to $9.42 billion. Domestic theme park revenue accounted for 68% of that, though the division experienced a 5% decline in operating income. CFO Hugh Johnston noted that despite challenges, consumers were “very value-focused,” showing willingness to spend on quality experiences.
On the sports front, Disney’s ESPN segment grew 8% in revenue to $4.81 billion. The company’s sports strategy is undergoing adjustments, particularly after exiting its Venu streaming venture with Warner Bros. Discovery and Fox. Iger commented on the shift, stating, “Venu basically looked redundant to us,” and emphasized the company’s focus on expanding ESPN with a new direct-to-consumer app set for launch this fall.
