The Walt Disney Co. beat Wall Street estimates on earnings but missed on revenue for the fiscal third quarter.
The Burbank entertainment and media giant reported on Wednesday adjusted net income of $2.2 billion ($1.03 a share) for the quarter ending on July 1, compared with adjusted net income of $2.1 billion ($1.09) in the same period a year earlier. Revenue grew by 4% from the third quarter of the prior year to $22.3 billion.
Analysts on average expected earnings of 95 cents on revenue of $22.5 billion, according to Thomson Financial Network.
Robert Iger, the chief executive of Disney, said that the quarterly results are reflective of what the company has accomplished through the unprecedented transformation it’s undertaking to restructure the company, improve efficiencies and restore creativity to the center of its business.
“While there is still more to do, I’m incredibly confident in Disney’s long-term trajectory because of the work we’ve done, the team we now have in place, and because of Disney’s core foundation of creative excellence and popular brands and franchises,” Iger said in a statement.
The direct-to-consumer business, which includes streaming services Disney+, ESPN+ and Hulu, showed an increase in revenue of 9% to $5.5 billion for the quarter. The operating loss was trimmed by 52%, from nearly $1.1 billion to $512 million.
Disney attributed the drop in the operating loss to a lower loss at Disney+, higher operating income at Hulu and a lower loss at ESPN+.
“The improvement at Disney+ was due to higher subscription revenue and a decrease in marketing costs, partially offset by higher programming and production costs and lower advertising revenue,” the company said. “Higher subscription revenue was attributable to Disney+ Core subscriber growth and increases in Disney+ Core retail pricing.”
The Disney+ Core subscriber base increased by 1% from the previous quarter to 106 million.
Shares in Disney (DIS) closed down 64 cents, or about 0.7%, to $87.49 on the New York Stock Exchange, on a day when the Dow Jones closed down a fraction of a percent.