Walt Disney earnings beat market estimates
Business
Walt Disney earnings beat market estimates
LOS ANGELES (Reuters) - Walt Disney reported on Wednesday quarterly earnings that exceeded Wall Street expectations, buoyed by the success of the animated Pixar film "Inside Out 2", which helped overcome a profit decline at theme parks.
April-June operating income nearly tripled at its Entertainment unit, with the combined streaming businesses of Disney+, Hulu and ESPN+ posting a profit for the first time.
But the company's shares slipped 0.8% before the bell as the experiences segment that includes parks and consumer products - and makes up just over half of the profit - recorded an operating income drop of 3%. Disney said "moderation" of demand at its U.S. parks could continue through the next few quarters.
Operating income for the unit is likely to fall by "mid-single digits" in the July-September quarter compared with the same period a year prior, Disney said.
Adjusted earnings-per-share reached $1.39 for Disney's fiscal third quarter, topping analyst estimates of $1.19, LSEG data showed. Revenue rose 4% to $23.2 billion, beating forecasts of $23.1 billion.
Chief Executive Bob Iger touted success in the entertainment division, where Disney's combined streaming businesses turned a profit a quarter ahead of its projections.
"We are confident in our ability to continue driving earnings growth through our collection of unique and powerful assets," Iger said in a statement.
Iger is working to rebuild Disney after billions of dollars in loss from streaming efforts, the decline of traditional television and a rough patch for its storied film studio.
The movie studio is showing signs of resurgence.
"Inside Out 2" notched $1.6 billion in global ticket sales and "Deadpool & Wolverine," which debuted in the current quarter, has brought in more than $850 million.
after reporting weaker-than-expected sales growth for blockbuster weight loss drug Wegovy.
"After several years of misfires and muted successes, Disney has now in a month and a half released the highest-grossing animated film of all time and achieved the largest ever opening for an R-rated film,"
MoffettNathanson media analyst Robert Fishman wrote ahead of Disney's earnings release.
While it remains to be seen whether those successes represent a return to form, Fishman said, the upcoming film slate is "filled with highly dependable" titles including "Moana 2" and Oscar-winning director Barry Jenkins' "Mufasa: The Lion King."
The Entertainment division, which includes the film, television and streaming businesses, reported operating income of $1.2 billion in the quarter.
The Disney+, Hulu and ESPN+ streaming services produced an operating profit of $47 million.
At the Sports unit, which includes the ESPN network and Star India business, operating income reached $802 million, a 6% decline from the previous year as costs to air cricket matches increased.
The Experiences unit reported operating income of $2.2 billion. While demand slid at domestic parks, cruise ships, consumer products, and some international parks "delivered improved results," Disney said.
