“The Walt Disney Co. toppled Wall Street expectations in its latest quarter, with the company’s entertainment division and streaming business leading the charge. Disney reported revenue of $24.7 billion in its fiscal Q1, which ended Dec. 28, up 5% from a year ago. Segment operating income totaled $5.1 billion, up 31% with earnings per share”, — write: www.hollywoodreporter.com
Disney reported revenue of $24.7 billion in its fiscal Q1, which ended Dec. 28, up 5% from a year ago. Segment operating income totaled $5.1 billion, up 31% with earnings per share of $1.76, up 44%.
In entertainment, Moana 2 powered the division, with revenues surging by 9% year over year and operating income rising to $1.7 billion. And direct-to-consumer continued to be on a growth trajectory, generating $293 million in operating income.
Disney had previously guided Wall Street to a slight decline in subscribers, and while that did come to fruition at Disney+, which shed 700,000 subscribers to 124.6 million, Hulu added 1.6 million subscribers to 53.6 million as it became more integrated into Disney+. The subscriber numbers were better than the Street had anticipated, particularly the growth at Hulu.
Meanwhile, Disney’s Experiences division was hit by Hurricanes Milton and Helene, as well as costs associated with the launch of the Disney Treasure cruise ship. The hurricanes incurred a $120 million impact, with Milton shutting down Disney World for a day.
Revenue in the division was $9.4 billion, up 3% from a year earlier, with operating income of $3.1 billion, flat from a year earlier, suggesting that were it not for the one-off issues, the division would have had healthier margins.
And at ESPN, domestic revenue was $4.4 billion, up 9% year over year, with domestic operating income of $231 million, down 9%, wing largely to costs associated with the College Football Playoff.
Disney also reported a $50 million cost associated with its decision to wind down the streaming service Venu.
“Our results this quarter demonstrate Disney’s creative and financial strength as we advanced the strategic initiatives set in motion over the past two years,” said Disney CEO Bob Iger in a statement. “In fiscal Q1 we saw outstanding box office performance from our studios, which had the top three movies of 2024; we further improved the profitability of our Entertainment DTC streaming businesses; we took an important step to advance ESPN’s digital strategy by adding an ESPN tile on Disney+; and our Experiences segment demonstrated its enduring appeal as we continue investing strategically across the globe. Overall, this quarter proved to be a strong start to the fiscal year, and we remain confident in our strategy for continued growth.”
The company gave some additional guidance for Q2, including further modest declines in Disney+ subscribers compared to Q1, and higher costs at ESPN connected to college sports and an extra NFL game.
More to come.