Disney reported higher quarterly profits Wednesday, posting increased revenues in its streaming business as it eyes a rollout of a key ESPN product later this year.
The entertainment giant, which has raised subscription prices on streaming, pointed to the success of “Moana 2” and other box office hits as a revenue driver, while income from amusement parks was dented somewhat by US hurricanes.
Profits came in at $2.6 billion, up 34 percent from the year-ago level on a five percent increase in revenues to $24.7 billion.
Besides “Moana 2,” which has generated more than $1 billion worldwide in ticket sales, Disney touted Inside Out 2, Deadpool & Wolverine and Mufasa: The Lion King as other signs of huge momentum in the studio business.
In the closely-watched streaming business, declines in international figures fueled an overall drop in Disney+ subscribers.
But the company scored higher revenue per subscriber in both domestic and international portions of Disney+ following price hikes.
Executives said they were happy with the performance overall.
“We took prices up significantly fairly recently and expected the churn would be significantly greater,” said Disney Chief Executive Bob Iger on a conference call with analysts.
“It turned out we delivered numbers that were better than we had expected.”
But Disney projected a “modest” decline in Disney+ subscribers compared with the first quarter.
Disney is focused on a fall launch of a new ESPN product that aims to make the sports product a “flagship,” Iger said”
The new offering will have a “high degree of customization and personalization” and “of course the inclusion ultimately of some form of betting and fantasy,” Iger said.
Iger described the new product as a “pretty compelling consumer proposition” for sports junkies.
“We’re on 365 days a year, 24 hours a day,” Iger said. “So if you’re a sports fan, it’s not about one day of one boxing event or one day of football. It’s about sports every single day of the year and every hour of the day.”
In its amusement park division, Disney had increased revenues but lower profits. Because of Hurricane Milton, Disney shut Walt Disney world Resort in Florida for a day and canceled a cruise.
The company estimated the impact of the hurricanes at around $120 million in the quarter.
Disney confirmed key full-year targets for fiscal 2025,including the generation of $15 billion in cash provided by operations.
Shares declined 1.5 percent in early-afternoon trading.
