NEW YORK — Disney exceeded its predictions for the first quarter, largely due to the blockbuster success of “Moana 2.”
Though there were significant expectations surrounding the animated feature, which was initially slated to be a streaming series, its cinematic release surpassed all forecasts. The film’s opening weekend set a new record for Thanksgiving ticket sales.
For the period concluding on December 28, the Walt Disney Company reported earnings of $2.55 billion, or $1.40 per share. In comparison, the previous year’s earnings were $1.91 billion, translating to $1.04 per share.
When adjusted for special one-time charges and benefits, the company’s earnings reached $1.76 per share, exceeding analyst predictions by 32 cents, based on estimates gathered by Zacks Investment Research.
Disney’s revenue saw a 5% increase, totaling $24.69 billion, outperforming analysts’ expectations. The Entertainment division specifically experienced a revenue surge of 9%, while revenue from content sales and licensing surged by 34%, credited largely to the success of “Moana 2.”
CEO Bob Iger and CFO Hugh Johnston remarked in their prepared statements that the enduring appeal of the Moana franchise illustrates the strong audience connection to Disney’s narratives and characters. This also confirms the company’s strategy of investing in beloved intellectual properties.
The direct-to-consumer branch, which encompasses Disney+ and Hulu, reported an operational profit of $293 million, reversing the loss of $138 million reported the previous year. This division also saw a 9% revenue increase, bringing it to $6.07 billion.
Disney+ experienced a slight 1% increase in paying subscribers in North America, which encompasses both the U.S. and Canada. However, there was a 2% drop in international subscribers, not accounting for Disney+ HotStar. Overall, the total count for Disney+ subscribers fell by 1% this quarter, with 125 million paying subscribers reported, representing a minor decline from the previous quarter. Including Hulu, Disney’s total subscriptions reached 178 million, marking an increase of 900,000 from the last period.
During a conference call, Iger expressed satisfaction with the subscriber growth for both Disney+ and Hulu, particularly in light of recent price hikes.
“Disney’s earnings outperforming expectations highlights the effectiveness of its cost-cutting measures and the robust performance of its theme parks and studios, balancing out challenges faced in streaming,” noted Jesse Cohen, a senior analyst at Investing.com. “However, the unexpected drop in Disney+ subscribers—a first since its 2019 onset—raises concerns about market saturation and the implications of its pricing strategy.”
Looking to the future, Disney anticipates a modest decrease in Disney+ subscribers during the second quarter relative to the first quarter, yet projects a high-single-digit growth in adjusted earnings per share for fiscal 2025.
Meanwhile, the Experiences division, which includes six global amusement parks, a cruise line, merchandise, and video game licensing, reported steady operating income at $3.11 billion. There was a 5% drop in operating income at domestic parks due to hurricanes affecting Walt Disney World in Orlando, Florida, which led to a one-day closure and cruise cancellations. Conversely, international parks and Experiences reported a 28% increase in operational earnings.
In morning trading on Wednesday, Disney shares experienced a bump of approximately 1%.
