Walt Disney posted better-than-expected results for April through June and raised its full-year earnings guidance today as the company’s streaming television profits grew and US theme park visitors increased their spending.
Adjusted earnings per share rose 16% from a year earlier to $1.61 for Disney’s fiscal third quarter.
Analysts had expected $1.47, according to the consensus estimate from LSEG. For the full year ending in September, the company projected adjusted EPS of $5.85, a 10-cent increase from a prior forecast.
The rosy earnings report was released a day after Disney announced a major deal with the National Football League, which will take a 10% equity stake in Disney’s ESPN sports network. The value of the deal was not disclosed.
Disney is working to build its streaming business in both sports and entertainment as traditional TV viewing declines. It also is expanding its popular theme parks and cruise lines.
Disney CEO Bob Iger said the launch of the ESPN app on August 21 and the NFL deal, along with a coming integration of Hulu into Disney+, would create “a truly differentiated streaming proposition.”
“With ambitious plans ahead for all our businesses, we’re not done building, and we are excited for Disney’s future,” Iger said in a statement.
The company projected it would add 10 million Disney+ and Hulu subscribers in the current quarter, most of them from an expanded partnership with cable operator Charter CHTR.O.
In the just-ended quarter, operating income in the entertainment division fell 15% to $1 billion. Disney attributed the drop to lower results from traditional television networks and the strong performance of the film “Inside Out 2” a year earlier.
Disney’s parks division reported a 13% increase in operating income to $2.5 billion. Profit at domestic parks rose 22% even with new competition in Orlando, Florida, from Universal’s Epic Universe, which opened in late May, as visitors increased their spending.
Walt Disney World in Orlando posted record revenue for the quarter, Disney Chief Financial Officer Hugh Johnston said.
At the sports unit, operating income rose 29% to $1 billion. Domestic ESPN profit fell 3%, partly from higher programming and production costs, including rate increases for NBA games and college sports.
