Disney narrowly beats estimates as streaming boosts entertainment segment

Disney reported its fiscal fourth-quarter earnings Thursday, narrowly beating analyst estimates as streaming growth helped propel its entertainment segment. 

Here is what Disney reported compared with what Wall Street expected, according to LSEG

Disney's net income increased to $460 million, or 25 cents per share, from $264 million, or 14 cents per share, during the same quarter last year. Adjusting for one-time items, including restructuring and impairment charges, Disney reported earnings per share of $1.14. 

Total segment operating income increased 23% to $3.66 billion compared with the same period in 2023.  

Revenue for the entertainment segment – which includes the traditional TV networks,  direct-to-consumer streaming and films – increased 14% year over year to $10.83 billion after a hot summer at the box office.

Disney Pixar's "Inside Out 2" became the highest-grossing animated movie of all time this summer, surpassing Disney's "Frozen II" at the box office. Meanwhile, its "Deadpool & Wolverine" became the highest-grossing R-rated film of all time, surpassing Warner Bros. Discovery's "Joker."

The films added $316 million of profit for the entertainment segment during the quarter. Overall, the entertainment segment reported nearly $1.1 billion in profit.

Revenue for Disney's sports segment, made up primarily of ESPN, was flat. ESPN's profit fell 6% due in part to higher programming costs associated with U.S. college football rights as well as fewer customers in the cable bundle. 

Disney's combined streaming business, which includes Disney+, Hulu and ESPN+, saw profitability improve during the quarter after turning its first profit during the fiscal third quarter, three months earlier than expected. The division reported an operating income of $321 million for the September period compared with a loss of $387 million during the same period last year. 

Disney joined its peers, including Warner Bros. Discovery, Netflix, Comcast and Paramount Global in adding streaming subscribers during the most recent quarter. 

Disney+ Core subscribers – which excludes Disney+ Hotstar in India and other countries in the region – grew by 4.4 million, or 4%, to 122.7 million. Hulu subscribers grew 2% to 52 million. 

Average revenue per user for domestic Disney+ customers dropped from $7.74 to $7.70, as the company had a higher mix of customers on its cheaper, ad-supported tier and wholesale offerings. 

Meanwhile the company's traditional TV networks business continued to decline as consumers leave pay TV bundles behind in favor of streaming. Revenue for the networks was down 6% to $2.46 billion. Profit for the segment sank 38% to $498 million. 

The experiences segment, which includes Disney's theme parks as well as consumer products, saw revenue grow 1% to $8.24 billion. 

The domestic parks' operating income rose 5% to $847 million, helped by higher guest spending at the parks and cruise lines. 

Operating income at the international parks, however, fell 32% due to a decline in attendance and in guest spending as well as increased costs. 

This story is developing. Please check back for updates.