Disney (DIS) reported fiscal first-quarter results Thursday that handily topped expectations, with the company’s streaming growth serving as a counterweight to the weakness in its more virus-exposed theme parks and experiences businesses.
The entertainment giant posted an unexpected profit, whereas another quarterly loss was expected. Subscribers to Disney+ also surged even more than expected to 94.9 million, or well ahead of the 90.2 million anticipated. Shares jumped more than 2% in late trading after the results were released.
Here were the main results in Disney’s report, compared to consensus estimates compiled by Bloomberg:
Revenue: $16.25 billion vs. $15.92 billion expected and $20.86 billion year-over-year
Adjusted earnings per share: 32 cents vs. loss of 38 cents expected and earnings of $1.53 year-over-year
While Disney still posted a third straight quarter of revenue declines, the drop was not quite as severe as expected, even as most of Disney’s lucrative theme parks, cruises and other experience-based businesses remained pressured by the pandemic.
Disney+ has been the key source of momentum for the entertainment giant while other areas of the business floundered. The streaming platform grew its Disney+ subscribers to 94.9 million as of Jan. 2, increasing these even further after reporting 86.2 million subscribers as of Dec. 2 at its investor day. Including the 12.1 million subscribers to ESPN+ and 39.4 million subscribers to Hulu, Disney’s streaming ecosystem had a total of more than 146 million paying users.
However, the company’s subscriber numbers still pale compared to those at Netflix, which reported nearly 204 million global paid viewers as of the end of last year.
Still, prospects for further growth at Disney+ have been a key catalyst for the company’s stock, which hit a record high of $191.25 earlier on Thursday ahead of earnings results. Disney said at its investor day that it expects between 230 million-260 million global subscribers by the end of fiscal 2024, up significantly from the 60 million-90 million target the company offered in 2019. Disney+ is expected to become a profitable business segment by fiscal 2024 as well. And the company will also be increasing the price of Disney+ by $1 to $7.99 for U.S. users starting in March.
But while Disney+ soared, Disney’s parks, cruises and other live entertainment operations languished throughout much of 2020. This area of the business had once served as the profit engine of Disney prior to the virus, but swung to losses in each of the past three consecutive quarters as visitations dried up. The parks, experiences and consumer products business segment posted an operating loss of $119 million in the first quarter, though this was much better than the loss of more than $530 million expected.
“We continue to see significant impacts from the COVID-19 pandemic across many of our businesses. While some operations have resumed, our parks, experiences and products segment has undoubtedly been hard hit by COVID,” Disney Chief Financial Officer Christine McCarthy said during Thursday’s earnings call. The company said it expects that Disneyland and Disneyland Paris will both be closed throughout the entirety of the current quarter.
However, she added that across parks that have reopened, “average daily attendance grew significantly from Q4 into Q1, benefiting from typical seasonality factors as well as solid underlying demand trends.”
While most of Disney’s global parks have reopened with limited capacity, Disney’s flagship theme parks in Anaheim, Calif. remain closed due to the pandemic. Disneyland and Disney California Adventure have both been closed since last March, and the aggregate impact of global park closures and weak visitor trends led Disney to slash tens of thousands of jobs throughout last year. Just last week, however, two California Assembly members introduced legislation that would allow theme park operators to reopen their locations sooner than previously proposed.
Shares of Disney have risen about 35% over the last year, outperforming the S&P 500’s 16.5% gain over that period.
Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter: @emily_mcck
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