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The box office success of Moana 2 helped push Disney’s earnings up 27 per cent in its financial first quarter and offset declines at its theme parks group, which was affected by two hurricanes in Florida and the cost of expanding its cruise line.
Disney ended a strong year at the cinemas with holiday releases of Moana 2 and Mufasa: The Lion King, which contributed to a 95 per cent increase in operating income in the company’s entertainment group in the quarter from a year earlier. “We saw outstanding box office performance from our studios,” Bob Iger, Disney chief executive, said in a statement.
Disney’s studios had the top three films worldwide last year — Inside Out 2, Deadpool & Wolverine and Moana 2 — marking a rebound from a lacklustre performance in 2023 that had raised investor concerns about its creative spark.
Net income before taxes rose to $3.66bn in the quarter from $2.87bn a year earlier. Disney reported adjusted earnings of $1.76 per share, up from $1.22 a year earlier, exceeding Wall Street estimates of about $1.45 per share.
Revenue at the streaming business, which includes Disney+ and Hulu, rose 9 per cent and generated $293mn in operating income, reversing a $140mn loss a year earlier. Together, Disney+ and Hulu have 178mn paid subscribers, which increased by about 900,000 in the quarter.
But the company expects a “modest decline” in Disney+ subscribers in the current quarter, which raised some concerns among investors. In a call with investors, Disney executives said they were investing in the technology underpinning the streaming service. This should help it add and retain subscribers, said Hanna Howard, a portfolio manager at Gabelli Funds.
“They’re focused on the right things on the streaming side,” Howard said. “They believe they’re well positioned to both grow subscriptions and grow profits over the next few years.”
Revenue and operating income continued to decline at Disney’s traditional television business. But, during a call with investors, Iger called the network business “an asset” which helps the streaming services. While rival Comcast last year announced it was spinning off some of its cable TV assets, Iger said “we actually feel good about the hand that we have” in television.
Iger said he wouldn’t rule out the possibility that some of the smaller networks might be “configured differently”.
Investors also have been closely watching Disney’s theme parks and experiences group, which roared back after the end of pandemic restrictions but have slowed in recent quarters.
The company said Hurricanes Milton and Helene had a $120mn impact on Disney World in Florida and the cancellation of a cruise itinerary. But the non-US parks and experiences business posted a 28 per cent increase in operating income from a year earlier.
The launch of the Disney Treasure cruise ship cost $75mn in pre-opening expenses in the quarter, and the company said it expected to spend a total of about $200mn to expand the Disney Cruise Line in financial 2025.
For all of 2025, Disney said it expected to generate about $15bn in cash from operations, with operating income from its streaming business reaching $875mn this year.
Disney’s shares are up about 15 per cent over the past year, compared with 22 per cent for the S&P 500.
