Walt Disney Co. returned impressively to profitability in the third quarter, boosted by the success of its streaming business and a strong box office performance. For the first time, Disney’s combined streaming services, which include Disney+, Hulu, and ESPN+, have turned a profit a momentous occasion for the company. Of course, the positive earnings report was partially driven by the box office smash “Inside Out 2,” which contributed meaningfully to overall revenues for the company.
The entertainment segment at Walt Disney, based on its movie studio and some areas of its television wing, more than nearly tripled, with operating income rising to 1.2 billion dollars. “Inside Out 2” powered this, now the highest-grossing animated film of all time with more than 1.5 billion globally. The success of “Inside Out 2” contributed indispensable role to this growth. Continuing Disney’s momentum at the box office was the expectation surrounding “Deadpool & Wolverine,” placing the company with both the year’s top two films.
Streaming Revenue Surge
The company’s direct-to-consumer segment, including Disney+ and Hulu, turned in an operating loss of $19 million for the quarter, down drastically from $505 million a year ago in the same period. Revenues were up 15% to $5.81 billion on the back of fast-growing streaming platforms.
In addition to the positive earnings, Walt Disney accelerated pricing for its streaming services. On Oct. 17, prices for Disney+ and Hulu with ads will increase by $2 to $9.99 per month or the ad-free versions go up to $15.99 per month and $18.99 per month, respectively. ESPN+, which is ad-only has increased to $11.99 per month.
For the quarter ended June 29, Walt Disney posted earnings of $2.62 billion, or $1.43 per share, from a year-ago loss of $460 million or 25 cents a share. Adjusted earnings reached $1.39 per share, topping analyst estimates of $1.20.
Domestic parks did okay, but with issues. Walt Disney warned that the moderation in demand its U.S. parks faced could continue into the next few quarters. That slowdown, along with inflation-driven costs, hit the segment’s operating income.
Looking ahead, Walt Disney now expects a rise of 30% in full-year adjusted earnings per share, which signals confidence in its recovery and yearly growth strategy moving further. CEO Bob Iger will continue his efforts to energize the company from its sluggish run following a challenging period, as shareholders showed overwhelming support for him continuing at the helm.
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