Disney (DIS) reported first quarter earnings on Wednesday that beat expectations as the media and entertainment giant reported a profit in its streaming segment while its parks business faced setbacks in the midst of two back-to-back hurricanes and greater cruise ship investments.
Disney+ subscribers also fell by 700,000 in the quarter as a result of expected user churn amid recent price increases. The company hiked the price of its various subscription plans in mid-October.
Analysts polled by Bloomberg had expected subscribers to decline by 1.41 million. The company had reported a loss of 600,000 Disney+ subscribers in the year-ago period. For the current quarter, the company said it expects another "modest decline" in Disney+ subscribers compared to Q1.
Shares ticked up around 2% in pre-market trading following the results.
Revenue of $24.70 billion beat expectations of $24.57 billion in the quarter and represented a 5% increase from the prior-year period.
Adjusted earnings per share of $1.76 came in ahead of the $1.42 analysts polled by Bloomberg had expected. Earnings increased 44% from a year ago.
For full-year 2025, Disney reaffirmed guidance of high-single digit EPS growth compared to fiscal 2024. Estimates are calling for an 8.1% increase year over year.
Across its various segments, the company saw mixed results, highlighted by a 5% decline in operating income for the company's domestic parks and experiences segment. This reflected a "9 percentage-point adverse impact to year-over-year growth due to the hurricanes and cruise pre-opening expenses," the company said in the release.
Disney estimated in November that Hurricanes Helene and Milton would register a hit of about $130 million in the quarter, while the Disney cruise line pre-launches would tack on an additional $90 million.
The company maintained its prior guidance that operating income at the parks will improve beyond the first quarter, estimating growth between 6% and 8% for full-year 2025.
Outside of parks, operating income at Disney entertainment increased 95% year over year as the company enjoyed a string of theatrical hits at the box office, including "Mufasa" and "Moana 2."
And on the streaming front, its direct-to-consumer (DTC) streaming business — which includes Disney+, Hulu, and ESPN+ — swung to a profit of $293 million from a loss of $138 million one year ago, ahead of analyst expectations. It marked the third straight quarter of profitability for the streaming business.
Achieving consistent profits in streaming is critical for Disney and other media giants as more consumers shift to DTC services from traditional pay-TV packages. The company said it continues to expect streaming profits of approximately $875 million in fiscal 2025.
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