Disney parks swing to a profit and Disney+ hits 116 million subscribers

Walt Disney Co. swung to a profit in the third fiscal quarter, with improved results at its key parks and products division helping the entertainment colossus beat earnings estimates on Wall Street on Thursday.

Disney’s streaming business continued to grow, with Disney+ reaching 116 million subscribers during the quarter, up from the 103.6 million the company reported in May.

Burbank-based Disney reported revenue of $17 billion during the three months that ended July 3, up 45% from a year ago, when the entertainment industry was in the deep throes of COVID-19 restrictions on theme parks and movie theaters. The results beat analyst estimates of $16.7 billion.

Quarterly profit for the company was $923 million, compared to a net loss of $4.7 billion in the prior-year quarter. Earnings of 80 cents a share were better than the 55 cents predicted by analysts polled on FactSet.

Parks continued to recover from pandemic doldrums in the quarter. Revenue for Disney’s parks, experiences and products segment — which includes Walt Disney World and Disneyland Resort — was $4.34 billion, up from $1.06 billion a year ago.

Operating income in parks and experiences was $356 million, compared to a year-ago loss of $1.88 billion, the company said.

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Sales from Disney’s all-important direct-to-consumer business, composed of services such as Disney+, Hulu and ESPN+, increased 57% to $4.3 billion. The division, considered the company’s top priority, narrowed losses to $293 million, compared with about $624 million a year earlier.

Disney+ has grown quickly since its debut in November 2019. Its 116 million subscribers are more than double its count at the same time in 2020. Disney said increased subscription revenues and sales of “Cruella,” which was released to Disney+ for $30 at the same time as its theatrical launch, contributed to revenue growth.

Bob Chapek, chief executive of Disney, attributed the growth to hits such as Pixar’s film “Luca” and Marvel shows “Loki” and “The Falcon & the Winter Soldier.”

Disney’s simultaneous release strategy, which it used for some movies during the pandemic, has been controversial. “Black Widow” star Scarlett Johansson recently sued Disney, saying the same-day video on-demand release strategy cheated her out of income. Disney has said her claims are without merit.