Disney Reports Q1 Earnings Beat, Streaming Profit, and Park Setbacks

Key Takeaways:

* Disney (DIS) reported better-than-expected first-quarter earnings.
* Streaming segment swung to a profit, marking its third consecutive profitable quarter.
* Domestic parks and experiences revenue declined due to hurricanes and cruise ship expenses.
* Disney+ subscribers declined by 700,000, but the loss was lower than analysts' estimates.

Earnings Overview:

* Revenue: $24.70 billion, exceeding expectations ($24.57 billion) and up 5% year-over-year.
* Adjusted EPS: $1.76, surpassing analysts' estimates ($1.42) and rising 44% from last year.
* Streaming: DTC streaming business reported a profit of $293 million, compared to a loss of $138 million in Q1 2023.

Segment Performance:

* Domestic Parks and Experiences: Operating income declined by 5%, impacted by hurricanes and cruise pre-opening expenses.
* Disney Entertainment: Operating income surged by 95% driven by successful theatrical releases like "Mufasa" and "Moana 2."

Outlook:

* Disney+: Modest subscriber decline expected for Q2 compared to Q1.
* Parks: Operating income projected to grow between 6% and 8% for full-year 2025.
* Streaming: Company reiterates guidance of approximate $875 million streaming profit for fiscal 2025.

CEO Transition:

* Disney continues to seek a successor for current CEO Bob Iger, with an announcement expected in early 2026.

Implications:

Disney's earnings highlight the company's continued focus on streaming profitability amid industry shifts. Despite setbacks in its parks business, Disney's strong streaming performance and positive earnings outlook indicate its resilience in the evolving media landscape.