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Disney’s streaming business continues to shine, turning a profit for the second quarter in a row.
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The House of Mouse on Thursday released mixed fourth fiscal quarter results, with growth being driven primarily by its streaming business. The company’s traditional TV division continued to struggle.
Disney stock rose more than 8% during pre-market trading on Thursday morning.
“This was a pivotal and successful year for The Walt Disney Company (DIS+5.97%), 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,” Disney CEO Bob Iger in a statement said. “In Q4 we saw one of the best quarters in the history of our film studio, improved profitability in our streaming businesses, a record-breaking 60 Emmy Awards for the company, the continued power of live sports, and the unveiling of an impressive collection of new projects coming to our Experiences segment.”
Overall, Disney’s profit rose 74% in in the three months ending Sept. 30 to $460 million, from $264 million in the same period the prior year. The company’s revenue was up 6% year-over-year to $22.6 billion billion in its fourth quarter, from $21.1 billion. Its earnings per share came to $1.14, beating Wall Street expectations of $1.11, according to a consensus estimate from analysts surveyed by FactSet (FDS+1.04%).
Disney said its streaming platforms’ operating income rose to $321 million in the three months ending Sept. 30, compared with a loss of $387 million during same period in 2023.
It took Disney five years since the launch of Disney+ to finally turn a profit from its streaming business. Last quarter, Disney reported that its streaming services, which also include Hulu and ESPN+, turned a profit for the first time, and earlier than anticipated. The company had previously expected its streaming services to first turn a profit in the fourth quarter.
Deutsche Bank (DB+1.98%) Research analyst Bryan Kraft wrote in a recent research note that Disney’s new bundle with Max should have helped with subscriber growth in the fourth quarter.
Paid subscriptions for Disney+ rose 4% to 122 million year over year and Hulu subscriptions grew 2% to 52 million.
But Disney continues to struggle with its traditional television assets, which include the broadcast network ABC and its cable channels National Geographic, FX, and others. The company reported that its operating income from the linear networks fell 38% to $498 million in its fourth fiscal quarter, from $805 million in the same quarter in 2023.
Warner Bros. Discovery and Comcast are both also dealing with the same challenges and have each considered the idea separating their streaming and studio assets from their struggling cable network businesses.
Disney’s parks and experiences division recorded 1% growth in revenue, to $8.2 billion. Its operating income fell 6% year-over-year, to $1.7 billion. This segment of the company was impacted by several disruptions including hurricanes Helene and Milton, and a drop in demand in Europe during the Paris Olympics.
