Disney profits top estimates on strength in theme park business
The entertainment giant's third-quarter profits came in at US$2.6 billion, revenues rose 6.8% to US$25.2 billion.
On Wednesday, Disney announced better-than-expected profits for the third quarter, driven by a robust performance in its theme park business. The entertainment giant reported profits of US$2.6 billion, nearly half of the US$5.1 billion from the same period last year, largely due to a substantial one-time tax benefit. Revenue for the period increased by 6.8% to US$25.2 billion. Disney's "Experiences" business saw growth, with Walt Disney World in Florida marking a "standout quarter," and forward bookings remaining strong.
The parks division had previously been considered vulnerable to inflation, which has impacted consumer spending. However, Disney acknowledged a slowdown in international visitors to its U.S. venues. Despite this, the company reported higher revenues in its entertainment business, primarily due to a surge in streaming subscriptions. The box office success of "Toy Story 5" and "The Devil Wears Prada 2" contributed to this growth. However, "Star Wars: The Mandalorian" and "The Gorgon" underperformed.
In its sports division, Disney's operating profit fell short of expectations due to four-game sweeps in the NBA basketball playoffs and increased sports rights costs. Despite these challenges, Disney announced a new partnership with TikTok. This collaboration will allow fans and creators to produce short videos using Disney content, which will be shared on both TikTok and Disney's streaming platform.
The deal will pilot in the U.S. for now, with plans to expand to other markets in the future. Disney's stock rose by 3.8% in pre-market trading following the earnings announcement.
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