This week, The Walt Disney Corporation (NYSE: DIS) and Warner Bros. Discovery Inc (NASDAQ: WBD) released their quarterly results and told very different stories. Although quite small by Disney’s standards, the Mouse House reported its first-ever streaming profit and several months ahead of schedule. On the other hand, struggling Warner Bros. Discovery reported a $10 billion loss due to a $9.1 billion write-down related to its TV network division. The already weak second quarter showed the rapid decline of its television business, causing Warner Bros shares to tumble on Wednesday after the results were released. In addition to the rapid decline of its traditional business, Warner Bros is struggling to gain a foothold in a very different and changing landscape, the momentum of which has been shaped by the Netflix Inc (NASDAQ: NFLX) revolution. Unlike Warner Bros, Disney seems to have found its way in the Netflix era, with Iger’s leadership enabling its renaissance.
Disney Third Quarter Financial Highlights
For the quarter ended June 29, Disney reported a 4% year-over-year increase in total revenue to $23.155 billion.
The highlight of the report was undoubtedly Disney’s progress in its efforts to catch up with Netflix. While Disney+ and Hulu already reported a profit in the previous quarter, this was the first profit for the combined streaming service of ESPN+, Disney+ and Hulu, which posted an operating profit of $47 million, reversing the $512 million loss a year earlier. However, ESPN is now part of the sports unit, while Disney+ and Hulu are part of the direct-to-consumer entertainment segment.
The entertainment segment brought in $10.58 billion, with revenue increasing 4%.
On the other hand, falling revenues at U.S. parks hurt the experience segment more than expected. The division’s operating profit shrank nearly 4% to $2.22 billion, with U.S. parks down 6%, dwarfing 2% growth at international parks and cruise lines. Revenue at the experience unit, which includes both domestic and international parks and experiences as well as consumer products, still rose 2% to $8.386 billion.
With “Inside Out 2,” Disney was also able to rebuild its box office success during the same period, recording worldwide ticket sales of $1.6 billion.
To be more specific, Disney reported a profit of $2.62 billion, a significant improvement from the $460 million loss a year earlier. Adjusted earnings per share reached $1.39, beating the LSEG estimate of $1.19.
The story of a Disney Renaissance
It took five years, but Disney broke even in streaming. As Disney leverages technology in this division, raises prices on streaming services, and follows in Netflix’s footsteps in cracking down on password sharing, for example, Iger added that this momentum is expected to continue to grow in fiscal 2025. Although the Parks division reported a decline in operating profit, Disney was able to keep its blockbuster magic with Inside Out 2 And Dead Pool&Wolverine, with the latter grossing more than $850 million in the current quarter. That means that in just 90 days, Disney released both the highest-grossing animated film of all time and the biggest opening for an R-rated film. Now Iger just needs to find a suitable successor so he can retire in peace and for good in 2026.
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This article was written by an unpaid outside contributor. It does not represent Benzinga’s reporting and has not been edited for content or opinion.
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This article, “Streaming profitability and box office success tell the story of a Disney renaissance,” originally appeared on Benzinga.com
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