Disney’s profit and revenue climbed in its fiscal third quarter as the entertainment company continued to add subscribers to its streaming service and see strength at its domestic theme parks.
The Walt Disney Co. earned $5.26 billion, or $2.92 per share, for the three months ended June 28. A year earlier it earned $2.62 billion, or $1.43 per share.
Excluding certain items, earnings were $1.61 per share. This easily beat the $1.46 per share analysts polled by Zacks Investment Research were looking for.
Revenue for the Burbank, California, company totaled $23.65 billion, falling slightly short of Wall Street’s estimate of $23.68 billion.
Last night the NFL announced that it had entered into a nonbinding agreement with ESPN, which Disney owns. Under the terms, ESPN will acquire NFL Network, NFL Fantasy and the rights to distribute the RedZone channel to cable and satellite operators and the league will get a 10% equity stake in ESPN.
Revenue for Disney Entertainment, which includes the company’s movie studios and streaming service, edged up 1%, while revenue for the Experiences division, its parks, increased 8%.
Disney’s direct-to-consumer business, which includes Disney+ and Hulu, posted quarterly operating income of $346 million compared with a loss of $19 million a year ago. Revenue climbed 6%.
The Disney+ streaming service had no change in paid subscribers domestically, which includes the U.S. and Canada. There was a 2% rise internationally, which excludes Disney+ HotStar.
Total paid subscribers for Disney+ came to 128 million subscribers, up from 126 million in the second quarter.
Disney+ and Hulu subscriptions totaled 183 million, up 2.6 million from the second quarter.
The Experiences division, which includes Disney’s six global theme parks, its cruise line, merchandise and video game licensing, reported operating income increased 13% to $2.52 billion. Operating income climbed 22% at domestic parks. Operating income declined 3% for international parks and Experiences.
Disney announced in May that it will build a seventh theme park in Abu Dhabi.
While Disney continues to pull levers to successfully manage all of the different components of its business, it’s also working on its search for a successor to CEO Bob Iger, the face of Disney for most of the past two decades.
Disney created a succession planning committee in 2023, but the search began in earnest last year when the company enlisted Morgan Stanley Executive Chairman James Gorman to lead the effort.
Disney does have some time, as Iger agreed to a contract extension that keeps him at the company through the end of 2026.
Disney is looking at internal and external candidates. The internal candidates are widely believed to include the chairman of Disney-owned ESPN, Jimmy Pitaro, Chairperson of Walt Disney Parks and Resorts Josh D’Amaro, Disney Entertainment Co-Chairman Alan Bergman and Disney Entertainment Co-Chairman Dana Walden.
