Disney shocks: Streaming profits rise, but parks lose millions to hurricanes

Disney released first-quarter results that beat analysts' expectations. While its streaming division posted a profit, the theme park segment faced challenges due to two hurricanes and higher investment in cruise ships.

Disney $DIS reported that the number of Disney+ subscribers fell by 700,000 in the first quarter. This decline was expected due to the increase in subscription prices in October. Analysts had originally projected a decline of up to 1.41 million subscribers, meaning the actual number was more favorable. The company expects another slight decline in the second quarter.

Although the company's stock initially rose 2% after the results were released, investors later reassessed the situation and the growth faded. Disney reported revenues of $24.70 billion, which beat analysts' expectations ($24.57 billion) and represented a 5% year-on-year increase. Adjusted earnings per share were $1.76, well above expectations of $1.42. Total profit was up 44% year-over-year.

Results across the company's segments were mixed. Home Parks and Amusement Experiences saw a 5% decline in operating profit due to the negative impact of the hurricanes and the cost of new cruise ships. Disney previously estimated that Hurricanes Helene and Milton had a $130 million impact on quarterly results, while costs associated with the launch of new cruise ships totaled $90 million. Still, Disney expects park operating profit to grow 6-8% in 2025.

In contrast, Disney's entertainment segment grew 95% year-over-year, driven by the success of films like "Mufasa" and "Moana 2." The streaming division of Disney+, Hulu and ESPN+ posted a profit of $293 million for the first time in three quarters, compared to a loss of $138 million last year. The company expects streaming segment profits to reach approximately $875 million in 2025.

Disney now faces another key challenge - finding a successor to current CEO Bob Iger, who plans to leave in early 2026. The company's future leadership will have to face rapid changes in the media industry and continue the transition to direct-to-consumer services.

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