(New York) Entertainment giant Disney saw its profit significantly reduced in the first three months of the year due to writedowns, but saw its streaming activities (streaming) become profitable for the first time.
This is a major step for the Burbank (California) group, which reoriented its strategy in 2019 and made colossal investments in internet video at the cost of colossal losses.
Net profit fell to just $216 million, compared to $1.5 billion in the same period a year earlier.
This air gap is mainly due to a depreciation of assets, linked to Disney’s decision to merge its Indian television subsidiary with its competitor Viacom18, a subsidiary of the Indian conglomerate Reliance.
The Californian group now only controls 36.8% of the new entity. This operation led him to incur a major exceptional charge of $2 billion.
Reported per share and excluding exceptional items, the benchmark market indicator, net profit came to $1.21, above what analysts expected ($1.12).
Based on these quarterly results, Disney now expects annual growth of 25% in its earnings per share excluding exceptional items, compared to 20% until now.
The most salient element of this publication is the shift into the green of the streaming activity, for the first time since the launch of the Disney+ platform in November 2019.
Managing Director Bob Iger nevertheless warned that this segment would again be in deficit for the current quarter, before becoming profitable again during the following three months.
The group hopes for further improvement during the 2025 financial year, which starts in early October.
Wall Street sanctions
With 153.6 million subscribers across all services at the end of March, the entertainment empire did less well than the 155.6 million expected.
But, excluding Indian assets, the subscriber portfolio is growing by 6%, supported by the dynamism of North America (+17% year-on-year).
During the earnings conference call, Bob Iger recalled that the group would begin blocking streaming access sharing in June, with a ramp-up in September.
“We are optimistic” regarding the impact of these measures on the subscriber portfolio, which could accelerate subscriptions, explained the boss. “We are encouraged by Netflix’s results” in this area.
The end of sharing identifiers a year ago boosted the results of Disney’s competitor in online video.
Another driver of the group, amusement parks, cruises and related products, whose revenues increased by 10%, driven by international markets (+ 29%).
Financial director Hugh Johnston nevertheless reported “signs of moderation” in tourism after a period of euphoria following the lifting of restrictions linked to the COVID-19 pandemic.
In total, the company’s turnover reached $22.1 billion, 1% better than the same period of 2023.
Disney’s accounts, on the other hand, were tarnished by the fall in revenues from cinema, the group not having had a major release during the first three months of the year.
Furthermore, the company also suffered from the slowdown in traditional television (-8%), an underlying trend. Disney controls several channels in the United States, including ABC, and the cable channels FX and National Geographic.