Disney reported a profitable third quarter on Wednesday after recent financial struggles, which included its streaming business turning a profit for the first time.
According to the Associated Press (AP), Disney’s direct-to-consumer division, which includes Disney+ and Hulu, reported a reduced operating loss of $19 million, down significantly from a loss of $505 million last year. Revenue for this segment rose 15 percent to $5.81 billion.
This financial report follows Disney’s announcement of price increases for Disney+, Hulu and ESPN+ that took effect on October 17. Prices for Disney+ and Hulu with ads will each increase by $2 to $9.99 per month, while the ad-free versions will see similar increases.
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The AP cited Disney as reporting that its combined broadcast businesses achieved profitability due to a strong performance from ESPN+ and better-than-expected results from its direct-to-consumer unit. Disney CEO Bob Iger and CFO Hugh Johnston noted in prepared remarks that ESPN had its third-most-watched primetime quarter in a decade among adults 18-49, driven by major sporting events.
Additionally, Disney’s operating income nearly tripled to $1.2 billion, as Disney’s box office success included Inside Outside 2which recently became the highest-grossing animated film of all time with over $1.5 billion in global revenue and the current success of Deadpool & Wolverine.
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For the quarter ending June 29, Disney earned $2.62 billion, or $1.43 a share, reversing a $460 million loss from a year earlier. Adjusted earnings were $1.39 a share and revenue rose 4 percent to $23.16 billion, beating Wall Street’s forecast of $22.91 billion, the AP reported.
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The company now forecasts a 30 percent increase in adjusted earnings per share for the full year, the AP reported.
Newsweek reached out to Disney via email for comment.
However, the news comes as Disney’s theme parks have underperformed. Experts cite rising prices and increased competition as reasons for the drop in visitors following the COVID-19 pandemic.
According to the AP, the company warned that reduced demand at US parks could continue in the coming quarters as fourth-quarter operating income for the Experiences division is expected to decline by a mid-single digit.
Disney attributed the decline in domestic park operating income to rising costs from inflation, technology spending and new guest offerings. Revenue for domestic parks rose 3 percent in the third quarter, while international park revenue rose 5 percent, the AP reported.
According to Bloomberg UK, Disney is aiming to cut costs by eliminating roughly 140 jobs — or about 2 percent of staff — at Disney Entertainment Television.
Bloomberg UK cited “people with knowledge of the matter” who did not want to be identified, saying the company’s ABC stations and networks such as NatGeo and Freeform would be worst hit by the changes. NatGeo will reportedly lose 13 percent of its staff.
Disney is also said to be cutting jobs in its marketing and publicity teams.
This isn’t the first time Disney has faced staff cuts. Since Iger returned to the entertainment conglomerate in 2022, he has cut billions of dollars in costs at Disney and eliminated more than 8,000 positions as part of a plan to eliminate $7.5 billion in annual expenses.