Disney (DIS) reported first quarter earnings on Wednesday that beat expectations as the media and entertainment giant reported a profit in its streaming segment while its parks business faced setbacks in the midst of two back-to-back hurricanes and greater cruise ship investments.
Disney+ subscribers also fell by 700,000 in the quarter as a result of expected user churn amid recent price increases. The company hiked the price of its various subscription plans in mid-October.
On the heels of price hikes, its direct-to-consumer (DTC) streaming business — which includes Disney+ and Hulu — swung to a profit of $293 million from a loss of $138 million one year ago, ahead of analyst expectations. It marked the third straight quarter of profitability for the streaming business.
Achieving consistent profits in streaming is critical for Disney and other media giants as more consumers shift to DTC services from traditional pay-TV packages. The company said it continues to expect streaming profits of approximately $875 million in fiscal 2025.
Shares bounced around in early trading but were down about 1% shortly after the opening bell.
Analysts polled by Bloomberg had expected Disney+ subscribers to decline by 1.41 million. The company had reported a loss of 600,000 Disney+ subscribers in the year-ago period. For the current quarter, the company said it expects another «modest decline» in Disney+ subscribers compared to Q1.
On the earnings call, Disney CEO Bob Iger said he’s «very pleased» with subscribers across its various streaming services, especially in the face of higher prices. Management expects users to grow throughout the rest of the year.
In a separate interview with Yahoo Finance, Disney CFO Hugh Johnston suggested the company will continue to raise prices, noting «the value that’s delivered in streaming, even compared to cable right now, is so strong.»
Revenue of $24.70 billion beat expectations of $24.57 billion in the quarter and represented a 5% increase from the prior-year period.
Adjusted earnings per share of $1.76 came in ahead of the $1.42 analysts polled by Bloomberg had expected. Earnings increased 44% from a year ago.
For the full year 2025, Disney reaffirmed guidance of high-single-digit earnings per share growth compared to fiscal 2024. Estimates are calling for an 8.1% increase year over year.
On the call, Johnston said that «the results were certainly in excess of expectations» but cautioned that it’s too early to adjust guidance given greater macro uncertainties. That being said, the executive added, «We’re certainly not a management team that’s afraid of over-delivering if, in fact, that is where the business takes us.»
Story Continues
