Walt Disney turned a surprise profit in its combined streaming business, but its stock was moving lower in Wednesday’s premarket trading as the company signaled that consumer spending pressure is impacting the parks business.
Disney shares were up about 1% in premarket trading Wednesday.
Overall revenue rose to $23.16 billion from $22.3 billion in the fiscal third quarter, driven by increases in all three of the company’s segments. Analysts surveyed by FactSet had been modeling $23.08 billion.
Disney’s entertainment business saw revenue rise 4% to $10.58 billion, despite a decline in revenue from linear networks. The direct-to-consumer business recorded a 15% uptick in revenue to $5.81 billion.
The company’s streaming business reached profitability on a combined basis a quarter before management was expecting to hit that milestone.
Disney now anticipates 30% growth in adjusted earnings per share for the full fiscal year. The FactSet consensus implied a projection for about 27% growth.
Subscribers to core Disney+ increased by 1% in the June quarter. Disney expects modest growth there in the September quarter.
Disney’s experiences segment drove a 2% revenue increase to $8.39 billion, coming in below the FactSet consensus, which was for $8.59 billion. The release noted a “moderation of consumer demand towards the end of Q3 that exceeded our previous expectations.”
That demand moderation “could impact the next few quarters,” Disney added.
The company reported fiscal third-quarter net income of $2.6 billion, or $1.44 a share, whereas it logged a loss of $460 million, or 25 cents a share, in the year-earlier period.
On an adjusted basis, Disney earned $1.39 a share, while analysts tracked by FactSet had been expecting $1.20 a share.