Walt Disney Earnings Beat Market Estimates; Profit Slips at Parks

The entrance to Walt Disney studios is seen in Burbank, California, US August 6, 2018. REUTERS/Lucy Nicholson/File Photo Purchase Licensing Rights
The entrance to Walt Disney studios is seen in Burbank, California, US August 6, 2018. REUTERS/Lucy Nicholson/File Photo Purchase Licensing Rights
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Walt Disney Earnings Beat Market Estimates; Profit Slips at Parks

The entrance to Walt Disney studios is seen in Burbank, California, US August 6, 2018. REUTERS/Lucy Nicholson/File Photo Purchase Licensing Rights
The entrance to Walt Disney studios is seen in Burbank, California, US August 6, 2018. REUTERS/Lucy Nicholson/File Photo Purchase Licensing Rights

Walt Disney reported on Wednesday quarterly earnings that exceeded Wall Street expectations, buoyed by the success of animated Pixar film "Inside Out 2", which helped overcome a profit decline at theme parks.

April-June operating income nearly tripled at its Entertainment unit, with the combined streaming businesses of Disney+, Hulu and ESPN+ posting a profit for the first time, Reuters reported.

But the company's shares slipped 0.8% before the bell as its experiences segment that includes parks and consumer products - and makes up just over half of profit - recorded an operating income drop of 3%. Disney said "moderation" of demand at its US parks could continue through the next few quarters.

Operating income for the unit is likely to fall by "mid single digits" in the July-September quarter compared with the same period a year prior, Disney said.

Adjusted earnings-per-share reached $1.39 for Disney's fiscal third quarter, topping analyst estimates of $1.19, LSEG data showed. Revenue rose 4% to $23.2 billion, beating forecasts of $23.1 billion.

Chief Executive Bob Iger touted success in the entertainment division, where Disney's combined streaming businesses turned a profit a quarter ahead of its projections.

"We are confident in our ability to continue driving earnings growth through our collection of unique and powerful assets," Iger said in a statement.

Iger is working to rebuild Disney after billions of dollars in loss from streaming efforts, the decline of traditional television and a rough patch for its storied film studio.

The movie studio is showing signs of resurgence.

"Inside Out 2" notched $1.6 billion in global ticket sales and "Deadpool & Wolverine," which debuted in the current quarter, has brought in more than $850 million.

"After several years of misfires and muted successes, Disney has now in the span of a month and a half released the highest grossing animated film of all time and achieved the largest ever opening for an R-Rated film," MoffettNathanson media analyst Robert Fishman wrote ahead of Disney's earnings release.

While it remains to be seen whether those successes represent a return to form, Fishman said, the upcoming film slate is "filled with highly dependable" titles including "Moana 2" and Oscar-winning director Barry Jenkins' "Mufasa: The Lion King."

The Entertainment division, which includes the film, television and streaming businesses, reported operating income of $1.2 billion in the quarter.

The Disney+, Hulu and ESPN+ streaming services produced operating profit of $47 million.

At the Sports unit, which includes the ESPN network and Star India business, operating income reached $802 million, a 6% decline from the previous year as costs to air cricket matches increased.

The experiences unit reported operating income of $2.2 billion. Demand slid at domestic parks, cruise ships, consumer products and some international parks "delivered improved results," Disney said.

Ben Barringer, technology and media analyst at Quilter Cheviot, said the parks results "pour fuel onto the fire" of concern about a slowing US economy.

"Coupled with other travel companies recognizing poor growth, it is clear people are scaling back their spend when it comes to tourism and recreation," Barringer said. "Some of this is due to Disneyland Paris struggling due to the Olympics being in town, as well as China going through its own economic problems, but the guide is not a positive one and thus we should expect further struggles through the rest of the year."



Meghan Markle's Netflix Show Delayed Due to LA Fires

Meghan Markle, who was born in Los Angeles, lives with her husband Prince Harry in Montecito, a swanky coastal enclave some 100 miles northwest of the city. SUZANNE CORDEIRO / AFP/File
Meghan Markle, who was born in Los Angeles, lives with her husband Prince Harry in Montecito, a swanky coastal enclave some 100 miles northwest of the city. SUZANNE CORDEIRO / AFP/File
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Meghan Markle's Netflix Show Delayed Due to LA Fires

Meghan Markle, who was born in Los Angeles, lives with her husband Prince Harry in Montecito, a swanky coastal enclave some 100 miles northwest of the city. SUZANNE CORDEIRO / AFP/File
Meghan Markle, who was born in Los Angeles, lives with her husband Prince Harry in Montecito, a swanky coastal enclave some 100 miles northwest of the city. SUZANNE CORDEIRO / AFP/File

A new Netflix series starring Meghan Markle, the actress wife of Britain's Prince Harry, has been delayed due to the devastating Los Angeles wildfires, the Duchess of Sussex said Sunday.
"With Love, Meghan," an eight-episode lifestyle and cooking show, had been due to debut on the streaming platform on Wednesday.
But with blazes that have killed at least 16 people still burning across Los Angeles, and thousands of homes destroyed, it has been pushed back to March, AFP said.
"I'm thankful to my partners at Netflix for supporting me in delaying the launch, as we focus on the needs of those impacted by the wildfires in my home state of California," Markle said in a statement.
Markle, who was born in Los Angeles, lives with Harry in Montecito, a swanky coastal enclave some 100 miles (160 kilometers) northwest of the city.
A Netflix statement called the show a "heartfelt tribute to the beauty of Southern California."
The delay was made at "the request of Meghan, Duchess of Sussex, and with the full support of Netflix.... due to the ongoing devastation caused by the Los Angeles wildfires," it said.
Last week, Harry and Meghan were seen in the Los Angeles suburb of Pasadena, comforting survivors of the fire.
They also issued a statement urging Californians to open their homes to evacuees.
"If a friend, loved one or pet has to evacuate and you are able to offer them a safe haven in your home, please do," said a statement posted to their official website.
A publicist did not respond to AFP request for comment on whether the couple had personally hosted any evacuees.
But a report in Britain's Telegraph said they were sheltering "friends and loved ones who have been displaced by the wildfires."
The pair had also donated "clothing, children's items and other essential supplies," it said.
A trailer for "With Love, Meghan" previewed the "Suits" star sharing tips on cooking, gardening, crafting, flower arranging and hosting.
Guests will include celebrated chef Alice Waters, actress Mindy Kaling and close friend Abigail Spencer, one of Markle's "Suits" co-stars. Harry appears briefly in the trailer.
Since stepping away from their official royal duties in early 2020, the Duke and Duchess of Sussex have been cut off from the royal purse, forcing them to develop their own sources of income.
Their partnership with Netflix yielded the much-talked-about "Harry & Meghan," a six-episode docuseries launched in December 2022.
In March 2024, Meghan launched the lifestyle brand American Riviera Orchard.