AP – Disney’s fourth-quarter adjusted profit beat Wall Street’s expectations, bolstered by strong results from its streaming service and box office success with Inside Out 2 and Deadpool and Wolverine.
Disney earned USD460 million, or 25 cents per share, for the period ended September 28. A year earlier the Burbank, California-based company earned USD264 million, or 14 cents per share.
Removing certain items, earnings were USD1.14 per share.
This topped the USD1.09 per share that analysts surveyed by Zacks Investment Research were looking for.
Shares jumped nearly 10 per cent before the market opened yesterday.
Revenue climbed six per cent to USD22.57 billion, but fell a bit short of Wall Street’s estimate of USD22.59 billion. Operating income for the entertainment segment, which includes its movie studio and parts of its television wing, more than quadrupled to USD1.07 billion.
This was helped in part by a strong performance from its content/sales, licensing and other segment, which benefited from USD316 million in operating income from Inside Out 2 and Deadpool and Wolverine.
The Walt Disney Co said yesterday that its direct-to-consumer business, which includes Disney+ and Hulu, reported quarterly operating income of USD253 million compared with an operating loss of USD420 million a year earlier.
Revenue rose 15 per cent to USD5.78 billion. The combined streaming businesses, which includes Disney+, Hulu and ESPN+, achieved profitability for the first time in the third quarter.
Disney+ saw a two-per-cent increase in paid subscribers domestically, which includes the United States and Canada. It had a five-per-cent rise internationally, which excludes Disney+ HotStar.
Disney ended the quarter with 174 million Disney+ Core and Hulu subscriptions, and more than 120 million Disney+ Core paid subscribers, an increase of 4.4 million over the prior quarter.
Disney said that its improved direct-to-consumer business results were due in part to subscription revenue growth thanks to increased in retail pricing and subscriber growth. Advertising revenue also increased and marketing costs at Disney+ declined.
“This was a pivotal and successful year for The Walt Disney Company, and thanks to the significant progress we’ve made, we have emerged from a period of considerable challenges and disruption well positioned for growth and optimistic about our future,” Chief Executive Officer Bob Iger said. The Experiences division, which includes six global theme parks, its cruise line, merchandise and videogame licensing, reported operating income dropped six per cent to USD1.7 billion.
Disney previously forecast that its fourth-quarter Experiences operating income would fall by mid single digits compared with the prior-year period due to domestic parks moderation as well as cyclical softening in China and less people at Disneyland Paris due to the impact the Olympics had.
