Disney Posts Better-Than-Expected Quarterly Results, Nears Streaming Profitability Goal

Disney topped Wall Street forecasts for its fiscal second quarter and inched closer to the long-awaited milestone of streaming profitability.

Revenue for the quarter ended March 30 increased to $22.1 billion from $21.8 billion in the year-earlier period. Excluding items, diluted earnings per share for the quarter increased to $1.21 from 93 cents. Analysts had been expecting revenue of $20.53 billion and earnings per share of $1.02.

The entertainment direct-to-consumer operation finished the quarter in the black. The company said it still expects its combined streaming businesses to be profitable in the fiscal fourth quarter, in line with guidance first established at the start of the streaming wars in 2019.

The number of Disney+ “core” subscribers (meaning the tally without Disney+ Hotstar) increased by 6.3 million to 117.6 million, with the gain better than analysts’ projections. Hulu, which recently became fully owned by Disney after a buyout of longtime joint venture partner Comcast, broke the 50 million subscriber barrier, finishing the quarter with 50.2 million.

Disney+ Core average revenue per user increased by 44 cents over the previous quarter. A deal with Charter Communications to integrate Disney streaming platforms with Spectrum pay-TV and broadband plans, took effect during the quarter and paced the subscriber gains.

The Sports unit, which was recently established as a way to set ESPN apart, saw revenue inch up 2% to $4.3 billion, while operating profit fell 9% to $799 million. The company blamed the softness on ongoing subscriber losses in the U.S. as well as one fewer College Football Playoff game than in the year-ago quarter.

Experiences, the division that encompasses theme parks and consumer products,