Disney's streaming arm posts maiden profit
The Walt Disney Company’s entertainment streaming arm swung to profit in the last quarter, the US giant confirmed on Tuesday, the first time since the 2019 launch of Disney+.
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Disney said revenues in its direct-to-consumer entertainment business - which includes Disney+ and Hulu streaming services - jumped 13% in the three months to March end to $5.64bn.
Operating income was $47m, compared to a $587m loss a year previously.
Disney said it had benefited from a jump in subscriber numbers, lower costs and higher prices.
However, once combined with sports streaming platform ESPN+, the division lost $18m, although that was a notable improvement on the $659m loss posted a year previously.
Overall, group revenues improved 1% to $22.1bn, although that was marginally below forecasts for $22.08bn.
Diluted losses per share fell to $0.01 from EPS of $0.69, depressed by goodwill impairment charges. On an adjusted basis, EPS jumped 30% to $1.21.
Bob Iger, Disney’s long-standing chief executive, said: "We are delivering on our strategic priorities and building for the future.
"Our results were driven in large part by our experiences segment as well as our streaming business. Importantly, entertainment streaming was profitable for the quarter, and we remain on track to achieve profitability in our combined streaming businesses in the fourth quarter."
Revenues in the experiences division jumped 10% to $8.38bn.
Iger was instrumental in shaping Disney during his 15 years at the helm, including overseeing the acquisitions of Pixar, Marvel and 21st Century Fox. He also oversaw the launch of Disney+, as the company looked to take on the popularity of streaming giants such as Netflix.
He retired from the company at the end of 2021, but in a surprise move was rehired just 11 months later, after his successor Bob Chapek was ousted.
As at 1315 BST, Disney had lost 5% in pre-market trading.
Kathleen Brooks, research director at XTB, said: "Expectations for Disney’s earnings were high, as the share price has risen by 30% in the year-to-date.
"Overall the earnings report beat expectations, which suggests that Iger’s turnaround plan is working. The results were not as bad as the sharp sell-off in th pre-market suggests."