Wednesday, 23 Jun 2021

Disney’s streaming service slows, coloring the company’s profitable quarter.


By Brooks Barnes

Lower programming costs at traditional television networks and improved results at Hulu and ESPN+ contributed to $912 million in quarterly profit at the Walt Disney Company, a result that was dramatically better than Wall Street analysts had predicted.

But growth at Disney’s flagship streaming service fell short of expectations, and Disney’s theme parks had another $400 million in operating losses. Disney shares fell about 4 percent in after-hours trading on Thursday.

The Disney+ streaming service now has about 104 million subscribers worldwide, the company said. (Analysts had been hoping for 110 million.) Hulu has about 42 million subscribers, up 30 percent from a year ago. About 14 million people now pay for access to the company’s sports-oriented ESPN+ platform, up 75 percent.

Disney’s direct-to-consumer unit continued to suffer losses, though not as steep as a year ago: $300 million in the quarter that ended on April 3 from $800 million last year.

“We’re pleased to see more encouraging signs of recovery across our businesses, and we remain focused on ramping up our operations while also fueling long-term growth,” Bob Chapek, Disney’s chief executive, said in a statement.

Profit in the most recent quarter, the second in Disney’s fiscal year, totaled $912 million, a 95 percent increase from a pandemic-battered $475 million a year earlier. Excluding one-time items, per-share profit rose 32 percent, to 79 cents from 60 cents.

Revenue was $15.6 billion, a 13 percent decline from a year ago.

Operating income at Disney’s traditional television business — which includes ESPN, ABC, Disney Channel, FX, Freeform and National Geographic — reached $2.8 billion in the quarter, a 15 percent increase. Disney attributed the improved results to lower programing costs and higher fees from cable distributors (based on multiyear contracts). A decrease in costs at ABC was primarily because of the timing of the Academy Awards, which aired later than in years past because of the pandemic.

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