Disney (DIS) reported Wednesday that its entire streaming division was profitable for the first time, but weakness in its parks division marred previously positive reports, with the company predicting “moderation in consumer demand” toward the end of the quarter. “It’s happening,” he pointed out.
In Disney’s fiscal third quarter, its direct-to-consumer (DTC) streaming business, which includes Disney+, Hulu and ESPN+, had operating income of $47 million, compared with a loss of $512 million in the year-ago period. The company previously expected to reach overall streaming profitability by this quarter.
Overall, the company reported third-quarter adjusted earnings per share of $1.39, which beat analysts’ estimates of $1.19 compiled by Bloomberg and beat the $1.03 Disney reported in the year-ago period. .
Revenue of $23.2 billion exceeded the consensus estimate of $23.1 billion and was higher than the year-ago period’s $22.3 billion.
Disney also raised its full-year adjusted earnings growth forecast to 30% from 25%.
Disney shares rose as much as 3% in premarket trading on Wednesday, but those gains have since disappeared. Disney stock has been mostly flat this year, according to the report.
Looking ahead, Disney said streaming profitability remains on track for improvement in the fourth quarter, with both DTC Entertainment (which posted a $19 million loss in the third quarter) and ESPN+ expected to be profitable. said.
The company said in a release that it “remains optimistic about our company’s trajectory with multiple components to improving margins in the coming years.”
One of these components is new price increases for these services. On Tuesday, the company announced it was raising prices again across its Disney+ and Hulu plans, with these changes set to go into effect in October.
Disney’s main disappointment in the quarter was its parks business, where domestic operating profit fell 6% from a year ago to $1.35 billion. The company warned that demand restraints could continue for “several quarters to come.”
The company added that Disneyland Paris will be affected by the usual reduction in consumer demand due to the Olympics and a slight softening in the Chinese business cycle. The company said it continues to see “strong” demand for cruises.
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