Disney has reported fiscal second-quarter earnings, exceeding analyst estimates through a reduction in streaming losses. In keeping with expectations, the firm’s revenue remained steady. The entertainment powerhouse saw a 17% spike in its total segment operating income, driven in part by turning a profit on their streaming platforms Disney+ and Hulu for the first time in the quarter.
When paired with ESPN+, Disney’s streaming operations reported a loss of $18 million during the quarter. This is a significant improvement from the $659 million loss reported the previous year. Excluding ESPN+, the company’s entertainment streaming revenue climbed 13% in the quarter, reaching $5.64 billion. Operating income was $47 million, bouncing back from a loss of $587 million the previous year. Disney attributed their financial recovery to the rise in Disney+ subscribers and higher average revenue each user generated.
Disney+ Core saw an increase of over six million subscribers during the second quarter, reaching a global customer base of 117.6 million. Hulu’s audience expanded 1% to encompass 50.2 million subscribers. However, ESPN+ experienced a 2% decrease in subscribers, totalling 24.8 million.
CEO Bob Iger commented on the results, explaining that “our results were driven in large part by our Experiences segment as well as our streaming business.” He noted the prosperity of the entertainment streaming sector this quarter, while adding that they are on track to achieve profitability in their aggregate streaming businesses in Q4.
The company reported a growth in revenue from U.S-based parks and experiences by 7%, amounting to $5.96 billion. International sales saw a dramatic 29% surge to $1.52 billion, credited to increased attendance and higher prices at the Hong Kong Disneyland Resort. Nevertheless, Disney reported a loss attributable to the company of $20 million, or 1 cent per share. This represents a sharp contrast to a profit of $1.27 billion, or 69 cents per share in the previous year.
Disney’s TV business has seen a downturn as the continuous decline in cable TV subscribers in the US ripples through the sector. Despite this, ESPN’s revenue rose 3% to $4.21 billion; however, operating income saw a 9% drop to $799 million. A decrease in advertising revenue, a drop in cable subscribers, and escalating programming costs were all cited reasons for the decline.
Linear network revenue, excluding ESPN, fell 8% to $2.77 billion, with operating income plummeting 22% to $752 million. Lower subscriber numbers, a drop in international affiliate fees, and decreased advertising revenue due to diminishing average viewership were noted as major contributing factors by Disney.
Sales in box office, licensing and other forms of content revenue suffered, falling 40% in the quarter to $1.39 billion due the lack of blockbuster movies in the period. Disney contrasted the most recent quarter with figures from the previous year, which encompassed the robust performance of “Avatar: The Way Water,” garnering more than $2.3 billion worldwide.
This story will be updated as new information becomes available.
