Disney Beats Q1 Expectations with Streaming Profitability
Key Highlights:
* Streaming: DTC business swings to profit of $293 million, ahead of estimates.
* Disney+ Subscribers: Decrease of 700,000 due to price hikes and churn.
* Revenues and Earnings: Revenue beats expectations at $24.70 billion, with earnings per share at $1.76.
* Parks and Experiences: Operating income declines by 5% due to hurricanes and cruise ship investments.
* Guidance: Company reaffirms high-single-digit earnings per share growth for fiscal 2025.
Detailed Analysis:
Disney reported better-than-expected earnings for the first quarter, driven by profitability in its streaming segment. The company's Disney+ and Hulu services combined for a profit of $293 million, beating analyst expectations. This marks the third consecutive quarter of profitability for Disney's streaming business.
Despite price increases, Disney+ subscribers experienced a decline of 700,000 in the quarter. The company attributed this to expected user churn and higher prices. However, Disney CEO Bob Iger expressed optimism about the future of its streaming services, noting that management anticipates subscriber growth throughout the year.
The company's parks and experiences segment faced headwinds due to the impact of hurricanes and cruise ship investments. Operating income declined by 5% year-over-year. Disney estimated that hurricanes and cruise ship expenses contributed to a 9 percentage-point decrease in growth.
Overall, Disney's results exceeded expectations, with revenue and earnings surpassing estimates. The company reaffirmed its guidance for fiscal 2025, indicating continued optimism about its streaming business and future growth.