Disney’s quarterly earnings report for April-June showed varying performance across its business units.
On the upside, its streaming businesses led by Disney+ and Hulu were strong, with substantial growth in profits and subscriber counts. This Direct to Consumer (DTC) unit reported operating income of $346M for the quarter, compared with a $19M loss in the same period last year.
Disney also made a series of strategic announcements impacting the division, including phasing out of the Hulu app and the launch of a standalone ESPN streaming platform, clarifying what Disney’s streaming division may look like in the 12-24 months ahead.
Revenue and profits were also strong at Disney’s “Experiences” division, made up of its theme parks, hotels, and cruise lines. Within the group, operating income was $2.52B, an increase of 13% from last year. One particular highlight was that Walt Disney World in Orlando had its biggest fiscal third quarter ever.
On the downside, Disney’s TV division was sharply down, with revenue falling by 15% and income by 28%. This represents another milestone in the decline of traditional linear television viewing.
Disney’s film studios show mixed results, with an impressive $1B box office gross from LILO & STITCH offset by disappointments from Pixar’s ELIO and Marvel’s THUNDERBOLTS*. Altogether, the studio division posted a slight $21M operating loss for the quarter.
Despite strong numbers in the areas that matter most, Disney stock fell by over 5% from concerns over a dim outlook for its cable assets and uncertainty over some of its major film properties, such as Marvel Studios.
