The Walt Disney Co. moved to a loss in its second quarter, hampered by restructuring and impairment charges, but its adjusted profit topped expectations and its streaming business turned a profit. Theme parks also continued to do well.
While Disney said Tuesday that it foresees its streaming business softening in the current quarter due to its streaming service in India, Disney+Hotstar, it expects its combined streaming businesses to be profitable in the fourth quarter and to be a meaningful future growth driver for the company, with further improvements in profitability in fiscal 2025.
Disney+ core subscribers climbed by more than 6% in the second quarter.
Revenue at Disney's domestic theme parks rose 7%, while its theme parks overseas reported a 29% increase.
“Looking at our company as a whole, it’s clear that the turnaround and growth initiatives we set in motion last year have continued to yield positive results,” CEO Bob Iger said in a prepared statement.
It's the first financial report since shareholders rebuffed efforts by activist investor Nelson Peltz to claim seats on the company board last month, standing firmly behind Iger.
For the period ended March 30, Disney lost $20 million, or a penny per share. That compares with a profit of $1.27 billion, or 69 cents per share, a year ago.
Restructuring and impairment charges surged to $2.05 billion from $152 million in the prior-year period.
Adjusted earnings were $1.21 per share, easily beating the $1.12 per share that analysts polled by Zacks Investment Research predicted.
The Burbank, California, company's revenue rose to $22.08 billion from $21.82 billion a year earlier. However, this was below Wall Street's estimate of $22.13 billion.
Shares slipped 2% before the market open.
In February The Walt Disney Co. said that it was making “significant cost reductions” and reduced its selling, general and other operations expenses by $500 million in its first quarter. The company cut thousands of jobs in 2023.
In March allies of Gov. Ron DeSantis and Disney reached a settlement agreement in a state court fight over how Walt Disney World is developed in the future following the takeover of the theme park resort’s government by the Florida governor.
Last month character performers at Disneyland in California and the union organizing them, Actors’ Equity Association, said they had filed a petition for union recognition.