Disney tops quarterly profit estimates, but starts to lose Disney+ streaming subscribers

Disney posted fiscal first-quarter earnings Wednesday that beat on the top and bottom lines, but revealed the beginnings of expected streaming subscriber losses at Disney+.

The company's streaming business reported another quarter of profitability despite a 1% decline in subscribers for Disney+, the company's flagship service. While domestic subscriptions for the platform increased around 1%, international numbers declined around 2%. 

Total paid Disney+ subscriptions stand at 124.6 million, compared to 125.3 million at the end of the company's fiscal fourth quarter. Total Hulu subscriptions rose 3% during the period to 53.6 million.

Disney warned investors that it expects another "modest decline" in subscribers during the second quarter. 

Still, Disney+'s average monthly revenue per paid subscriber increased roughly 4% to $7.99 due to price hikes, the company said.

Here is what Disney reported for the period ended December 28 compared with what Wall Street expected, according to LSEG

Disney's net income increased nearly 23% to $2.64 billion, or $1.40 per share, from $2.15 billion or $1.04 per share, during the same quarter last year. Adjusting for one-time items including restructuring charges and impairments related to intangible Hulu assets, Disney reported adjusted earnings of $1.76 per share. 

Revenue increased 4.8% to $24.69 billion compared to $23.55 billion in the year-earlier period.

The company saw revenue gains across the board for its entertainment, sports and experience segments. 

Its entertainment division saw a 9% jump in revenue, reaching $10.87 billion. Operating income for the unit, which includes its direct-to-consumer, linear and content sales businesses, increased 95% to $1.7 billion during the quarter thanks to higher content sales and licensing. Linear continued to drag on overall results. 

"In fiscal Q1 we saw outstanding box office performance from our studios, which had the top three movies of 2024," CEO Bob Iger noted in the company's earnings release Wednesday. 

The company said it expects double-digit growth in operating income for the entertainment segment in fiscal 2025, with an increase in direct-to-consumer operating income of around $875 million.

Over at its experiences business, which includes parks, cruises and resorts as well as consumer products, revenue rose 3% during the quarter to $9.42 billion. 

Domestic theme park revenue accounted for 68% of the division's total, or $6.43 billion. While that revenue marked a 2% improvement over the same quarter last year, the combination of Hurricanes Milton and Helene coupled with declines in attendance and investments in Disney's fleet of cruise ships weighed on domestic operating income. 

The experiences division posted a 5% decline in domestic theme park operating income for the quarter, at $1.98 billion. 

Disney expects its experience segment to see operating income growth of between 6% and 8% in fiscal 2025.

Disney's ESPN reported revenue growth of 8% year over year, reaching $4.81 billion, and operating income that was up 15% from the prior-year period to $228 million. 

The company expects operating income for its sports segment, which houses ESPN as well as Star India, to grow 13% in fiscal 2025.

This story is developing. Please check back for updates.