Disney Q1 Earnings: Streaming Profitability Amid Price Hikes, Parks Hit by Hurricanes
Financial Highlights:
* Revenue surged 5% year-over-year to $24.70 billion.
* Adjusted EPS jumped 44% to $1.76, exceeding analysts' estimates.
* DTC streaming segment swung to a profit of $293 million.
* Strong performance in entertainment segment, with a 95% increase in operating income.
Streaming Metrics:
* Disney+ subscribers declined by 700,000 in the quarter due to recent price increases.
* Management expects a modest decline in Disney+ subscribers in the current quarter.
* The company maintains target of streaming profitability of approximately $875 million in fiscal 2025.
* Price hikes for subscription plans drove profitability in the streaming business.
Parks and Experiences:
* Operating income declined 5% in the domestic parks segment due to hurricanes and cruise ship investments.
* Hurricane impact estimated at $130 million, while cruise line pre-launches added another $90 million.
* Management remains optimistic about the parks segment, projecting 6-8% growth in full-year 2025 operating income.
Other Key Developments:
* Venu Sports streaming service abandoned due to regulatory concerns.
* Hulu+ Live TV to merge with Fubo TV, enhancing the streaming experience.
* Bob Iger addresses successor search to navigate industry changes.
Analyst Outlook:
* Analysts had expected a larger decline in Disney+ subscribers (1.41 million).
* Consistent streaming profitability is crucial for Disney and other media giants in the face of shifting consumer behavior.
* Management remains cautious about adjusting guidance due to macro uncertainties.
* Despite challenges in the parks segment, Disney's overall financial performance exceeded expectations.
Stock Market Impact:
* Disney shares initially fluctuated in premarket trading.
* Shortly after the opening bell, shares declined by approximately 1%.