Disney (DIS) has released details of its earnings in Q2, with one of the highlights being the fact that the direct-to-consumer (DTC) division reached an operating income of $47m. This sector includes Disney+ and Hulu, while the same quarter in 2023 showed a loss of $587m.
Disney Stock Falls Despite Streaming Profits
Despite this upturn and the streaming part of the business reaching a profit for the first time, Disney expects the results in the current quarter to be weaker. Part of this stems from the losses incurred by Disney+ Hotstar in India. This news led to DIS shares dropping by up to 10% in Tuesday’s trading.
The DTC part of the business is now expected to post a loss in Q3. As the company’s traditional TV business continues to lose ground, making consistent profits from streaming becomes even more important. Some of the streaming areas suffered losses in Q2, giving an overall loss of $18m in Q2. However, the company expects to reach profitability on the full range of streaming products by Q4 2024.
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This led to adjusted earnings of $1.21 per share being declared for Q2. This was better than the 2023 figure of $0.93 and the analysts’ estimate of $1.10. Revenue was also ahead of expectations and last year’s numbers, with $22.1bn reported.
CEO Bob Iger recently called Netflix the gold standard for streaming and said that “obviously, we’re heartened by the results that Netflix has delivered in their password-sharing initiative and believe that it will be one of the contributors to growth”. He pointed out that Disney is building password-sharing technology to help it crack down on people sharing their subscriptions with others.
