Burbank, California – The Walt Disney Co. reported a loss in the second quarter due to restructuring and impairment charges, but the company’s adjusted profit exceeded expectations. Despite challenges in India affecting its overall streaming business, Disney+Hotstar, the streaming sector managed to turn a profit. Theme parks also saw continued success, prompting the company to raise its outlook for the year.
In the second quarter, the direct-to-consumer business, including Disney+ and Hulu, saw a significant improvement with quarterly operating income reaching $47 million, a stark difference from the $587 million loss reported a year prior. Revenue for this segment also increased by 13% to $5.64 billion, showcasing the positive impact of Disney’s growth strategies implemented the previous year.
Disney’s CEO Bob Iger expressed optimism about the company’s trajectory, highlighting the results of the turnaround and growth initiatives set in motion. The company’s efforts to focus on its core business model are paying off, as evident by the streaming division turning profitable earlier than anticipated, signaling a strong potential for future growth prospects.
Despite facing higher costs at its theme parks due to inflation, Disney’s domestic and overseas theme parks saw revenue growth – 7% and 29% respectively. The increase in guest spending at Walt Disney World and Disneyland, attributed to higher ticket prices and room rates, contributed to this positive performance. Additionally, the opening of a Frozen-themed section at Hong Kong Disneyland further boosted overseas revenues.
The company reported a loss of $20 million for the period ending March 30, primarily due to restructuring and impairment charges. However, adjusted earnings came in at $1.21 per share, surpassing analyst expectations. Disney is now aiming for a full-year adjusted earnings per share growth target of 25%, up from the earlier forecast of 20%.
Despite a slight revenue increase to $22.08 billion from a year ago, Disney faced a decline in content sales and licensing revenue in the second quarter due to the absence of significant movie releases. Shares dropped 5% following the release of the financial report.
In previous announcements, Disney emphasized significant cost reductions and operational efficiencies, leading to positive outcomes in the first and second quarters. The company’s ability to adapt to changing market dynamics and deliver profitable results in challenging times underscores its resilience and long-term growth potential.