Walt Disney Co (NYSE:DIS, ETR:WDP) has topped profit forecasts for the fiscal third quarter, driven by strong growth in its streaming and experiences segments, as revenue came in just shy of expectations.
Revenue for the June quarter increased 2% year-over-year to $23.65 billion, slightly below Wall Street estimates of $23.7 billion.
Earnings per share (EPS) improved to $1.61 from $1.39 in the year-ago quarter, ahead of estimates of $1.45.
Key growth drivers included a strong increase in streaming profits, which moved to an operating income of $346 million from a loss a year ago, fueled by a 6% revenue jump and subscriber growth to 183 million across Disney+ and Hulu.
The parks and experiences segment also performed strongly during Q3, with revenue up 8% to $9.1 billion and operating income rising 13%, led by domestic parks operating income growth of 22% to $1.7 billion.
On the downside, traditional linear television networks revenue declined 15% with operating income down 28%, impacted by decreased advertising revenue and international results following the Star India merger.
The entertainment division saw a 15% operating income decline to $1 billion due to weaker theatrical distribution and TV content sales results compared to the prior year, which benefited from a strong film slate like Inside Out 2.
Looking ahead, Disney raised its full-year profit forecast, now expecting EPS of $5.85, up from the previous guidance of $5.75.
Disney also expects continued subscriber growth, forecasting an increase of more than 10 million Disney+ and Hulu subscribers in the next quarter, with the majority coming from Hulu due to an expanded deal with Charter.
“We are pleased with our creative success and financial performance in Q3 as we continue to execute across our strategic priorities,” Disney CEO Robert Iger said in a statement.
“The company is taking major steps forward in streaming with the upcoming launch of ESPN’s direct-to-consumer service, our just-announced plans with the NFL, and our forthcoming integration of Hulu into Disney+, creating a truly differentiated streaming proposition that harnesses the highest caliber brands and franchises, general entertainment, family programming, news, and industry-leading sports content.”
Shares of Disney traded down 3.7% at $114 following its report.