Walt Disney Co reported a fiscal second-quarter profit that beat estimates, thanks to sharply narrower losses in its streaming TV business and higher ticket prices at theme parks.

Earnings at the world’s largest entertainment company rose to US$1.21 a share, excluding some items, in the period ended March 30, Disney said Tuesday (May 7), beating the US$1.12 average of analysts’ estimates compiled by Bloomberg. Profit climbed 12% at the division that includes parks, while losses from streaming shrank to US$18 million from US$659 million a year earlier.

Disney raised its guidance for full-year growth in earnings per share to 25% from 20%.

The results mark the fourth straight quarter that Disney has beaten analysts’ estimates. It’s a sign that a turnaround is gaining momentum under CEO Bob Iger, who returned to the role in 2022. Those gains helped Iger vanquish activist investor Nelson Peltz, who unsuccessfully campaigned for a board seat at Disney’s annual meeting in April.

Disney shares are up 29% this year through Monday, with Iger unveiling initiatives such as a US$1.5 billion investment in Fortnite developer Epic Games, steep cost cuts and the restoration of dividend payments.

The entertainment part of the company’s direct-to-consumer unit, which includes Disney+ and Hulu but not ESPN+, reported a profit of US$47 million, as sales growth outpaced higher costs for programming and marketing.

“We got profitable earlier than we expected as the costs came in better than expected,” chief financial officer Hugh Johnston said in a telephone interview.

Streaming results in the fiscal third quarter will be weaker due to the timing of cricket-related costs in India, Johnston said, but the company still expects its entire streaming business to be profitable in the fiscal fourth quarter. Profit in theme parks is forecast to be flat in the third quarter due to expenses such as a new cruise ship before resuming growth later in the year, Johnston said.

Earnings in Disney’s theme-park division rose to US$2.29 billion in the second quarter, driven by sharply higher results internationally, especially Hong Kong. Domestically, the company’s cruise line and Disney World resort in Florida registered income growth, while California’s Disneyland saw weaker performance due to higher costs.

Disney had no new theatrical releases in the quarter, partly due to the twin strikes by writers and actors last year. Iger is seeking to reinvigorate that business by delaying some films to focus on quality. The unit that includes the movie studio reported a loss of US$18 million in the quarter on a 40% decline in sales.

Traditional TV networks, once a growth engine for the company, reported weaker results. Sales fell 8% to US$2.77 billion in the unit that includes ABC, the Disney Channel and other TV networks. Profit fell 22% to US$752 million due to lower ad sales and fewer cable subscribers. 

In the sports segment, home to ESPN and related networks, sales rose 2% to US$4.31 billion while profit fell 2% to US$778 million, due in part to higher domestic rights fees.

  - Bloomberg