Disney (DIS) shares were rising about 1% Tuesday after-hours as the company was able to beat top- and bottom-line estimates for its December quarter thanks in part to the outperformance of its direct-to-consumer video offering, Disney+.
Disney reported earnings of $1.53 per share on revenue of $20.86 billion. Analysts were expecting Disney to report earnings of $1.44 per share on revenue of $20.79 billion.
Disney+ and the company’s other DTC offerings generated $3.99 billion in revenue during the quarter with 26.5 million subscribers. Analysts were expecting the company to report Disney+ subscriptions of 20 to 25 million.
While revenue jumped in the period, Disney also saw the DTC segment’s operating loss rise from $136 million to $693 million.
Disney still expects to have between 60 million and 90 million DTC subscribers by the end of 2024, but CEO Bob Iger told CNBC that the company would not be updating its guidance despite its strong start.
Disney reported an increase in operating income in its broadcast division, thanks to the consolidation of the Fox assets it purchased last year, but that was partially offset by another decrease in operating income at ESPN.
The decrease at ESPN was due to an increase in programming and production costs and lower advertising revenue. Rate increases by the NFL, College Football Playoffs and other sports programs led to the decrease in operating income at Disney's flagship sports division.
“We had a strong first quarter, highlighted by the launch of Disney+, which has exceeded even our greatest expectations,” said Iger in Tuesday’s earnings release. “Thanks to our incredible collection of brands, outstanding content from our creative engines and state-of-the-art technology, we believe our direct-to-consumer services, including Disney+, ESPN+ and Hulu, position us well for continued growth in today’s dynamic media environment.”
The company’s media networks segment brought in $7.36 billion, second place behind the $7.396 billion its theme park segment brought in during the quarter.
Disney shares were rising 1.2% to $146.42 in after hours trading and the stock is about even for the year so far.