Disney's Q1 Earnings Beat Estimates, Streaming Profits Surge
Disney (DIS) reported impressive first quarter earnings, exceeding analyst expectations. The media and entertainment giant turned a profit in its streaming segment despite setbacks in its parks business due to hurricanes and increased cruise ship investments.
Streaming Surge
Disney+ subscribers declined by 700,000 in the quarter, aligning with expectations. Despite price hikes, the company's direct-to-consumer (DTC) streaming business, including Disney+ and Hulu, swung to a profit of $293 million, up from a loss of $138 million a year ago. This marks the third consecutive quarter of profitability for Disney's streaming division.
Mixed Park Performance
Disney's parks division faced challenges in Q1, with operating income declining by 5%. Hurrican Helene and Milton, as well as pre-opening expenses for the Disney cruise line, contributed to the downturn. However, the company expects improvement in parks operating income in subsequent quarters.
Other Highlights
* Total revenue exceeded expectations at $24.70 billion, up 5% year-over-year.
* Adjusted earnings per share reached $1.76, surpassing estimates of $1.42.
* Disney reaffirmed its guidance of high-single-digit earnings per share growth for fiscal 2025, with an estimated increase of 8.1% year-over-year.
CEO Optimism
Disney CEO Bob Iger expressed confidence in the company's streaming services, despite recent price increases. He emphasized the value proposition of streaming compared to traditional cable.
Industry Landscape
Disney's results come as the industry navigates a shift from traditional pay-TV packages to DTC streaming services. Disney's consistent streaming profits underscore the importance of this transition.
Leadership Changes
Disney continues to search for a successor to CEO Bob Iger, who will step down in 2026. The company is expected to announce a new chief in early 2026.