Another quarter of profitability for Disney’s combined streaming platforms, along with the strong holiday box-office performance of the animated family film Moana 2 helped the media conglomerate exceed Wall Street earnings expectations for its fiscal first quarter.
Despite the loss of 700,000 Disney+ subscribers in the October - December period, which was to some extent the result of a price increase, Disney’s entertainment streaming business produced its second consecutive profitable quarter with $293 million in operating income. (The unit reported a loss of $138 million for the same period in fiscal 2024.) The business unit, which includes Disney+ and Hulu, saw revenue increase by 9% to $6.07 billion in the quarter.
Meanwhile, released over the Thanksgiving holiday weekend, Moana 2 has grossed $1.037 billion so far at the global box office. Disney said last year that the first iteration of the CGI franchise has been its most streamed movie title ever.
The Q1 performance of Disney’s video entertainment business helped the broader company overcome softness in its theme parks division, which was down in the quarter in the aftermaths of Hurricanes Milton and Helene.
Disney reported revenue of $24.69 billion overall, up 5% YoY. Analysts had forecast sales of around $24.55 billion. The company’s stock was down narrowly on Wall Street as of the typing of this sentence. (You can access Disney’s earnings release here.)
The company took a $50 million hit to its bottom line following the decision to scuttle its Venu Sports joint venture with Fox and Warner Bros. Discovery. The DTC venture had been beset by antitrust lawsuits from pay-TV operators.
Disney’s broader entertainment division, which combines direct-to-consumer streaming, linear TV and content sales from Disney studios, saw revenue increase by 9% to $10.87 billion, despite the continued drag by linear cable networks.
However, speaking to equity analysts during Wednesday’s earnings call, CEO Bob Iger dismissed the notion that Disney might spin off its cable channels in the same way that NBCUniversal and WBD chose to cast off theirs.
“We actually are at a point where the linear networks at our company are not a burden at all. They’re actually an asset,” Iger said.
“We are programming them, and we are funding them at levels that actually give us the ability to enhance our overall television business that obviously includes and leans into streaming, which, let’s face it, is really the future of the television business,” he added.
“So, while I won’t rule out the possibility some of the smaller networks in some form or another being configured differently in terms of how we bring them to market, maybe even ownership, but we’re not right now. We actually feel good about the hand that we have and the manner in which we’re managing both the linear and the streaming businesses across the board," said Iger.