Disney Reports Strong Earnings but Warns of Bumps Ahead

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Disney reported strong earnings on Tuesday, driven in part by a surprise profit at its flagship streaming service — a first. But investors responded nervously to a coming slowdown at Disney theme parks, which have recently been the company’s primary growth engine. Disney shares fell more than 9 percent, to about $105, by the close of trading. Revenue at Disney Experiences, a division that includes theme parks and cruise ships, totaled $8.4 billion, a 10 percent year-on-year increase. Operating income totaled $2.3 billion, up 12 percent. Wall Street, however, had hoped for stronger profit margins. In addition, Disney said higher wages, expenses tied to the arrival of two new cruise liners and — crucially — a general slowdown in travel would negatively affect the coming quarter. “We are seeing some evidence of a global moderation from peak post-Covid travel,” Hugh Johnston, the chief financial officer of Disney, said on a conference call with analysts. Disney+ had been expected to lose more than $100 million in the most recent quarter, widening losses since its 2019 arrival to roughly $12 billion. Instead, it swung to a $47 million profit, in part by adding 6.3 million subscriptions worldwide (excluding India), to bring its total to 117.6 million. Average revenue per paid subscriber climbed 6 percent, to $7.28.