Disney\u00a0posted fiscal first-quarter earnings Wednesday that beat on the top and bottom lines, but revealed the beginnings of expected streaming subscriber losses at Disney+.<\/p>\n
The company\u2019s streaming business reported another quarter of profitability despite a 1% decline in subscribers for Disney+, the company\u2019s flagship service. While domestic subscriptions for the platform increased around 1%, international numbers declined around 2%.\u00a0<\/p>\n
Disney warned during its\u00a0fiscal fourth-quarter report in November\u00a0that it expected a \u201cmodest decline\u201d in subscriptions during the December period. Disney told investors Wednesday that it expects another \u201cmodest decline\u201d in subscribers during the second quarter.\u00a0<\/p>\n
Total paid Disney+ subscriptions stand at 124.6 million, compared to 125.3 million at the end of the company\u2019s fiscal fourth quarter.\u00a0<\/strong>Total Hulu subscriptions rose 3% during the period to 53.6 million.<\/p>\n The slowdown in streaming subscriber growth follows an\u00a0increase in prices for its services last year.\u00a0Disney+\u2019s average monthly revenue per paid subscriber increased roughly 4% to $7.99 due to those price hikes, the company said.<\/p>\n Disney\u2019s stock was up about 2% in premarket trading.<\/p>\n Here is what Disney reported for the\u00a0period ended December 28\u00a0compared with what Wall Street expected, according to LSEG<\/p>\n Disney\u2019s net income increased nearly 23% to $2.64 billion, or $1.40 per share, from $2.15 billion or $1.04 per share, during the\u00a0same quarter last year.\u00a0Adjusting for one-time items including restructuring charges and impairments related to intangible Hulu assets, Disney reported adjusted earnings of $1.76 per share.\u00a0<\/p>\n Revenue increased 4.8% to $24.69 billion compared to $23.55 billion in the year-earlier period.<\/p>\n The company saw revenue gains across the board for its entertainment, sports and experience segments.\u00a0<\/p>\n Its entertainment division saw a 9% jump in revenue, reaching $10.87 billion. Operating income for the unit, which includes its direct-to-consumer, linear and content sales businesses, increased 95% to $1.7 billion during the quarter thanks to higher content sales and licensing. Linear continued to drag on overall results.\u00a0<\/p>\n Still, CEO Bob Iger remained positive on Wednesday\u2019s call with investors when it came to the linear TV business,\u00a0echoing\u00a0similar comments made in November\u2019s earnings call.<\/p>\n \u201cThey are not a burden at all. They are actually an asset,\u201d Iger said Wednesday, noting that Disney is programming and funding the networks so they can feed into streaming.<\/p>\n While he said he wouldn\u2019t rule out the possibility of changes to the TV networks in the future, he said that wouldn\u2019t be now.<\/p>\n \u201cWe actually feel good about the hand that we have and the manner in which we\u2019re managing both the linear and streaming businesses across the board,\u201d Iger said.<\/p>\n Disney\u2019s box office success helped lift the company\u2019s results during the quarter.<\/p>\n The debut of \u201cMoana 2\u201d over Thanksgiving weekend helped push the box office to\u00a0new heights. The animated sequel was still going\u00a0strong\u00a0at the box office through the new year, topping $1 billion during the Martin Luther King Jr. Day weekend. The company noted Wednesday its content sales\/licensing and other operating income got a boost from \u201cMoana 2.\u201d<\/p>\n Overall, Disney\u00a0dominated\u00a0the box office in 2024, with the help of other films like Marvel\u2019s \u201cDeadpool & Wolverine\u201d and Pixar\u2019s \u201cInside Out 2.\u201d<\/p>\n The company said it expects double-digit growth in operating income for the entertainment segment in fiscal 2025, with an increase in direct-to-consumer operating income of around $875 million.<\/p>\n Over at its experiences business, which includes parks, cruises and resorts as well as consumer products, revenue rose 3% during the quarter to $9.42 billion.\u00a0<\/p>\n Domestic theme park revenue accounted for 68% of the division\u2019s total, or $6.43 billion. While that revenue marked a 2% improvement over the same quarter last year, the combination of Hurricanes Milton and Helene coupled with declines in attendance and investments in Disney\u2019s fleet of cruise ships weighed on domestic operating income.\u00a0<\/p>\n The experiences division posted a 5% decline in domestic theme park operating income for the quarter, at $1.98 billion.\u00a0<\/p>\n Disney expects its experience segment to see operating income growth of between 6% and 8% in fiscal 2025.<\/p>\n Theme parks in the U.S. have recently experienced a slowdown in foot traffic following the post-Covid surge in attendance.<\/p>\n Disney CFO Hugh Johnston said Wednesday on CNBC\u2019s \u201cSquawk Box\u201d that the experiences segment performed better than expected for the fiscal quarter.<\/p>\n \u201cIn fact, the consumer is a bit stronger than we would have expected,\u201d Johnston said Wednesday. \u201cI think what we\u2019re seeing is consumers are just very value focused, and you deliver value to them, they\u2019re willing to pay the price for it.\u201d<\/p>\n Disney\u2019s parks recently\u00a0turned\u00a0a record revenue and profit, even as the company has raised prices for its destinations. The company is in the midst of a 10-year, $60 billion\u00a0investment\u00a0in the segment.<\/p>\n In sports, Disney\u2019s ESPN reported revenue growth of 8% year over year, reaching $4.81 billion, and operating income that was up 15% from the prior-year period to $228 million.\u00a0<\/p>\n The company expects operating income for its overall sports segment, which houses ESPN as well as Star India, to grow 13% in fiscal 2025.<\/p>\n Disney said on Wednesday that its sports segment operating incoming for the fiscal second quarter would be \u201cadversely impacted\u201d by about $100 million related to the shifting of three College Football Playoff games from the first quarter into the second quarter as well as an additional NFL game during the period.<\/p>\n This fall Disney\u2019s networks broadcasted the entirety of the Southeastern Conference college football schedule.<\/p>\n Disney\u2019s broadcaster ABC averaged 5.8 million viewers for 46 regular season college football games, which was a 56% year-over-year increase, Disney executives noted in a\u00a0commentary\u00a0release on Wednesday. The recent college football season helped\u00a0lift\u00a0Disney\u2019s advertising revenue this past season.<\/p>\n Meanwhile, Disney also said that guidance for unit operating income includes a roughly $50 million hit tied to its exit from the Venu sports joint venture. Disney and its joint venture partners,\u00a0Warner Bros. Discovery\u00a0and\u00a0Fox, called off their efforts to move forward with Venu, which was supposed to be a streaming app that included all of the live sports from its parent companies.<\/p>\n The change in strategy came after legal headaches that halted the launch of Venu last fall.<\/p>\n The\u00a0rise\u00a0of skinny bundles \u2014 traditional pay TV distributors\u2019 slimmed-down offerings focused on sports and news networks \u2014 were a contributing factor, too. Iger said on Wednesday\u2019s call with investors that Venu \u201cbasically looked redundant to us,\u201d next to skinny bundle offerings.<\/p>\n As a result of the Venu stoppage,\u00a0Fox on Tuesday announced\u00a0it would move forward with its own streaming service after years of staying largely on the sidelines of the direct-to-consumer streaming game. Fox executives also noted that skinny bundles would benefit its portfolio of networks.<\/p>\n Disney has been looking into various ways to grow its streaming options, from merging its apps into Disney+ to exploring different options for ESPN, such as Venu.<\/p>\n The company also plans to launch its own direct-to-consumer streaming app for ESPN this fall, which has been the priority, company executives said Wednesday.<\/p>\n \u201cWe\u2019re obviously leaning into the development of what is now called \u2018Flagship,\u2019 which is essentially ESPN with multiple, mulitple elements to it,\u201d Iger said Wednesday, noting sports betting and consumers\u2019 ability to customize the platforms to their preferences.<\/p>\n Disclosure: Comcast, which owns CNBC parent NBCUniversal, is a co-owner of Hulu.<\/em><\/p>\n<\/p>\n Disney\u00a0posted fiscal first-quarter earnings Wednesday that beat on the top and bottom lines, but revealed the beginnings of expected streaming subscriber losses at Disney+. The company\u2019s streaming business reported another quarter of profitability despite a 1% decline in subscribers for Disney+, the company\u2019s flagship service. While domestic subscriptions for the platform increased around 1%, international […]<\/p>\n","protected":false},"author":0,"featured_media":14673,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[],"class_list":["post-14672","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business"],"_links":{"self":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/posts\/14672","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/comments?post=14672"}],"version-history":[{"count":0,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/posts\/14672\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/media\/14673"}],"wp:attachment":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/media?parent=14672"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/categories?post=14672"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/tags?post=14672"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}