(Washington) The long-awaited streaming services of American entertainment giant Disney have become profitable for the first time, with an operating result finally positive, while the group saw its profits confirm their good trajectory in the third quarter of its staggered financial year.
Between April and June, the group achieved a positive net result of 2.6 billion dollars, compared to a net loss of 460 million over the same period a year earlier, but also a strong improvement compared to the 216 million net profit in the previous quarter.
Turnover increased by 3.6% over the year, reaching 23.2 billion dollars, slightly exceeding the 23.1 billion expected by analysts.
In the first nine months of its fiscal year ending in September, Disney’s sales reached $68.79 billion, up 1.6 percent from a year earlier.
A figure that is particularly closely watched by investors in the United States, earnings per share reached $1.43 for the quarter, compared to a loss per share of $0.25.
“We’re seeing an increase in consumption and in the popularity of our offerings, which we think gives us some leverage on pricing. Every time we’ve raised prices, we’ve seen a very low rate of subscriber loss, nothing that we would consider significant,” said the group’s CEO, Bob Iger, during a conference call with analysts.
The group announced on Tuesday a new price increase for its basic subscriptions, which rises to $9.99 against $7.99 per month in the United States.
However, the results did not impress the markets: in electronic trading before the opening of Wall Street, the title was down 1.97% at 88.20 dollars at 9 a.m. (9 a.m. Eastern time).
The good performance of streaming services is nevertheless good news for the group, which has invested heavily in this segment, after starting late compared to its competitor Netflix in particular.
Cinema party, not parks
These services Disney+, ESPN+, focused on sports offerings, and Hulu, of which Disney held the majority since 2019, before purchasing the remaining 33% of capital from the operator Comcast last November.
The segment’s revenue rose 15%, including the full integration of Hulu sales. Operating income showed a slight profit of $47 million, compared with a loss of $512 million a year earlier.
This is notably thanks to a slight increase in its subscriber base, in particular on its main platform, Disney+, which saw its subscribers reach 118.3 million, compared to 117.6 million a year earlier, while analysts were rather expecting a stabilization of the level.
In this case, Mr. Iger also welcomed having retained the broadcast rights to the NBA in the United States, on its ESPN and ABC channels, estimating that “this had enormous value to us”, in particular because of the duration of the contract, which allows the group to keep the NBA for the next 12 seasons.
On the cinema side, Disney is also benefiting from the excellent reception of “Inside Out 2”, which is still showing, and whose global revenues now exceed 1.5 billion dollars, only part of which is attributable to the past quarter.
For the current quarter, the group should also benefit from the release of its latest Marvel film, “Deadpool & Wolverine”, on July 26.
On the other hand, amusement parks are experiencing a drop in their revenues, partly due to the results of Disneyland Paris. The latter is suffering the backlash from the Olympic Games, which have created an avoidance effect of the French capital, classic for this type of major event for a certain number of tourists.
But that’s not all: in the United States, too, park attendance was not as expected, with domestic revenues falling by 6% over the year, and the group expects the trend to continue for several more quarters.
“40% of our revenues (in this segment, editor’s note) are not domestic, it is either the parks abroad or the derivative products. Overall, I think it is a slight slowdown that is more than offset by the results of our entertainment segment,” insisted Mr. Iger.