Disney studio earnings soar with ‘Moana 2.’ Hurricanes hit theme park profits

The box office tidal wave of “Moana 2” lifted Walt Disney Co.’s results for the fiscal first quarter, even as its reliable theme park sector was hampered by dual hurricanes in Florida.

The Burbank media and entertainment giant reported $24.7 billion in revenue for the three-month period that ended Dec. 28, a 5% increase compared to the previous quarter. Earnings before taxes totaled $3.7 billion, up 27% compared with the previous year. Earnings per share were $1.40 for the quarter, up from $1.04.

“Overall, we’re very encouraged by our results this quarter,” Chief Executive Bob Iger said during a Wednesday call with analysts. “Clearly, one of the great highlights was the performance of our film studios. We saw growth in streaming profitability, historic ratings on ESPN and the strong and enduring appeal of Disney’s experiences business.”

Investors weren’t totally convinced, as shares of Disney were down 84 cents, or 0.74%, to $112.46 early Wednesday morning.

Research firm CFRA maintained a “buy” rating for Disney stock, with senior equity analyst Kenneth Leon writing, “In 2025, we are confident Disney will realize improved performance.”

Disney’s entertainment segment, which includes its studios and Disney+ and Hulu streaming businesses, had another big fiscal quarter, notching $10.9 billion in revenue, an increase of 9% compared to the same period a year earlier.

Operating income for the sector nearly doubled to $1.7 billion, buoyed largely by the box office success of “Moana 2,” the sequel to the popular 2016 film about an adventurous teenager, starring the voice talents of Auli’i Cravalho and Dwayne Johnson.

Revenue for content sales and licensing, which includes theatrical film distribution, as well as sales and licensing of TV and film content, was up 34% to $2.2 billion, compared to $1.6 billion the previous year. The comparable period in 2023 included the animated film “Wish” and the superhero movie “The Marvels,” which disappointed at the box office.

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The company also saw continued gains in its streaming business.

Revenue for Disney’s entertainment streaming business, which includes Disney+ and Hulu, was $6.1 billion, an increase of 9% compared to the previous year. The two services had a total of 178 million subscribers in the first quarter, an increase of about 900,000 compared to the same period a year earlier. However, Disney+-only subscriptions were down 1% to 124.6 million, reflecting a price increase that quarter, which led to churn.

But it wasn’t all good news for Disney’s entertainment division. The company’s linear networks continued to struggle, reporting revenue of $2.6 billion, a 7% decrease compared to the previous year’s quarter, and operating income of $1.1 billion, down 11% compared to last year. Disney said the declines were because of higher programming costs and a decrease in affiliate revenue due to cord-cutting.

During Wednesday’s analyst call, Iger refuted the idea that the company’s linear networks were weighing on the company, instead calling them “an asset.” He said he wouldn’t rule out the possibility of configuring some of the smaller networks differently in terms of how they’re brought to market or “maybe even ownership,” but that right now, the company felt good about its situation.

“We actually are at a point where the linear networks in our company are not a burden at all,” he said. “We are programming them, and we are funding them at levels that actually give us the ability to enhance our overall television business, that obviously includes and leads into streaming, which, let’s face it, is really the future of the television business.”

Disney’s experiences division, which includes its lucrative theme parks, cruise line and specialty travel experiences like the Aulani resort in Hawaii, reported revenue of $9.4 billion, up 3% compared to last year. The segment’s operating income was essentially flat for the quarter at $3.1 billion. Domestically, Disney’s parks and experiences reported $2 billion in operating income, a decrease of 5% compared to the previous year.

Disney attributed the softer results — particularly in its domestic parks and cruises — to previously announced costs to launch its newest cruise ship, the Disney Treasure, as well as inflation and Hurricanes Helene and Milton. The company closed Walt Disney World Resort for a day and canceled a cruise itinerary due to Hurricane Milton.

The company’s sports business, which includes ESPN, reported revenue of $4.9 billion, essentially flat compared to the previous year. The segment’s operating income was $247 million, compared to a loss of $103 million during the prior year’s quarter. Domestic advertising revenue on ESPN increased 15% compared to the previous quarter a year earlier. Disney also touted its addition of an ESPN tile to the Disney+ home screen, as well as new, live sports shows exclusive to Disney+ that will debut later this year.

Disney attributed the quarterly improvement to its Star India business, noting there were no significant cricket events in the fiscal first quarter of 2025, as opposed to last year.

The company also completed its India joint venture with Reliance Industries Limited in the first quarter, combining its Star-branded entertainment and sports TV channels and the Disney+ Hotstar service in India with some of Reliance’s media assets. Disney now owns 37% of the joint venture. The company recorded a $33-million loss in the first quarter due to purchase accounting of the new venture.

The company also expects to write off about $50 million in the fiscal second quarter due to the dissolution of the Venu Sports streaming venture. Disney, along with partners Fox Sports and Warner Bros. Discovery, chose not to move ahead with the venture after a lawsuit blocking its debut was settled.