Disney’s Strong Financial Performance
The Walt Disney Company posted impressive first-quarter earnings, largely driven by the box-office success of Moana 2. Originally intended as a streaming series, the animated film’s theatrical release exceeded expectations, breaking the Thanksgiving opening record. Disney reported a net income of $2.55 billion, or $1.40 per share, for the quarter ending December 28, marking a significant rise from the $1.91 billion, or $1.04 per share, recorded in the previous year.
Adjusted earnings stood at $1.76 per share, surpassing Wall Street forecasts by 32 cents, according to analysts surveyed by Zacks Investment Research. Revenue saw a 5% increase, reaching $24.69 billion, with Disney’s Entertainment segment growing by 9%. Content sales and licensing revenue surged by 34%, primarily due to Moana 2’s strong box-office run.
Impact on Streaming and Direct-to-Consumer Business
Disney’s streaming division reported mixed results. The company’s direct-to-consumer business, which includes Disney+ and Hulu, reported an operating income of $293 million, a stark contrast to the $138 million loss recorded in the same quarter last year. Revenue for the segment rose 9% to $6.07 billion. However, total paid subscribers for Disney+ experienced a slight decline of 1% during the quarter, with domestic subscriptions increasing by 1% while international subscriptions, excluding Disney+ HotStar, fell by 2%.
The overall subscriber count for Disney+ stood at 125 million, reflecting a minor drop from the previous quarter. Despite this, Disney+ and Hulu together added 900,000 subscribers, bringing their combined total to 178 million. CEO Bob Iger remained optimistic, citing the company’s confidence in its pricing strategy and the enduring popularity of its content.
Future Outlook and Market Response
Despite the robust financial performance, concerns remain over Disney’s streaming strategy. Industry analysts, including Jesse Cohen of Investing.com, pointed out that the first-ever decline in Disney+ subscriptions since its 2019 launch signals potential saturation in an increasingly competitive market. Looking ahead, Disney anticipates a slight dip in Disney+ subscriptions in the second quarter but remains optimistic about achieving high-single-digit adjusted earnings per share growth for fiscal 2025.
The company’s Experiences division, which includes theme parks, cruise lines, and merchandise, maintained stable operating income at $3.11 billion. While international parks saw a 28% increase in income, domestic parks experienced a 5% decline due to hurricane-related disruptions at Walt Disney World in Orlando. Disney’s stock responded positively, climbing approximately 1% in morning trading on Wednesday, reflecting investor confidence in the company’s diversified revenue streams and strategic direction.
