Disney Reports Mixed Earnings with Streaming Profit But Parks Face Challenges

Disney (DIS) reported first quarter earnings on Wednesday that exceeded expectations, revealing a profit in its streaming segment despite challenges faced by its parks business due to two back-to-back hurricanes and increased cruise ship investments.

During the quarter, Disney+ subscribers fell by 700,000, primarily due to anticipated user churn linked to recent price increases in its subscription plans. The increase in pricing occurred in mid-October.

Bloomberg analysts had expected a decline of 1.41 million subscribers, while a year ago, the company reported a loss of 600,000 Disney+ subscribers.

The company generated revenue of $24.70 billion, surpassing analyst expectations of $24.57 billion, marking a 5% increase compared to the same period last year.

Adjusted earnings per share amounted to $1.76, which outperformed the consensus estimate of $1.42 from analysts surveyed by Bloomberg, showing a 44% increase year-over-year.

Disney's various segments experienced mixed results, particularly highlighted by a 5% decline in operating income for its domestic parks and experiences segment. The company attributed this decline to “9 percentage-point adverse impact to year-over-year growth due to the hurricanes and cruise pre-opening expenses,” as stated in their earnings release.

In November, Disney estimated that Hurricanes Helene and Milton would cause about $130 million in losses for the quarter, while the pre-launch expenses for the Disney cruise line would add approximately $90 million.

The company has maintained its previous guidance suggesting that operating income at the parks will enhance beyond the first quarter, with an estimated growth of 6% to 8% for the full fiscal year of 2025.

In contrast, operating income from Disney entertainment saw a substantial increase of 95% year over year, benefiting from several successful theatrical releases including "Mufasa" and "Moana 2."

In the streaming domain, the direct-to-consumer (DTC) streaming business—which encompasses Disney+, Hulu, and ESPN+—returned a profit of $293 billion, recovering from a $138 billion loss the previous year, also exceeding analyst expectations.

Achieving steady profits in streaming is vital for Disney and other media companies as consumers increasingly transition from traditional pay-TV packages to DTC services. The company anticipates streaming profits to reach about $875 million in fiscal 2025.

As Disney navigates these results, it is also in search of a successor to current CEO Bob Iger, with plans to announce a new chief executive in early 2026.