By Lukas I. Alpert
After inking major deals with the NFL and WWE, Disney announced coming changes to its streaming business and upped its forecasts
Disney reported major beats on net income and earnings per share. (Photo by BRYAN R. SMITH/AFP via Getty Images)
Walt Disney Co. is betting the kingdom on streaming, and so far it appears to be paying off.
Hot on the tail of announcing two major deals with the NFL and WWE, Disney (DIS) upped its forecast for its streaming business for the rest of the year and revealed several significant changes to come.
The company came in significantly ahead of analysts’ estimates on net income in its fiscal third quarter, largely due to a one-time tax benefit, but also riding heavily on growth in its streaming and theme parks businesses.
Disney, like all media companies, faces declines in its linear television properties and instability in its film business and is counting on streaming growth to drive its future.
Disney said it now forecasts that it will generate $1.3 billion in operating income from its streaming business due to higher-than-expected subscriber growth for the rest of its fiscal year, up from an earlier forecast of $1 billion.
It also said it expected to see 8% growth in the operating income of its experiences business, which includes theme parks and cruises, for the year, which is the top end of its earlier guidance.
Ahead of its earnings release on Wednesday, Disney announced two major deals with the NFL and the WWE to help bolster its position in developing its ESPN+ streaming platform. In the NFL deal, Disney will take control of the league’s media properties in exchange for a 10% stake in ESPN.
“The company is taking major steps forward in streaming with the coming launch of ESPN’s direct-to-consumer service, our just-announced plans with the NFL, and our forthcoming integration of Hulu into Disney+,” said Bob Iger, Disney’s chief executive. “And we have more expansions under way around the world in our parks and experiences than at any other time in our history.”
Disney said streaming services Disney+ and Hulu added 2.6 million subscribers from the end of the prior quarter, but said it would cease reporting subscriber figures for the services starting in January 2026. This follows in the footsteps of Netflix Inc. (NFLX), which stopped reporting such figures earlier this year.
The company also said it intends to roll Hulu into Disney+ “to continue to grow profitability and margins in our entertainment streamingbusiness through expected higher engagement, lower churn, and advertising revenue potential, as well as operational efficiencies that over time may result in savings that we can reinvest back into the business.”
Disney also laid out completed details on pricing for its developing ESPN+ business, which is set to launch at the end of August. An unlimited package will cost $29.99 a month, while a slimmer bundle will cost $11.99 a month. The company said it would offer a bundle of Disney+, Hulu and ESPN+’s unlimited package for $29.99 a month for the first 12 months.
The developments were met positively by analysts.
“The company eased concerns going into this quarter on both the parks and streaming businesses. The latter is in far better shape than it was a couple of years ago. The relentless focus on pivoting toward financials is evident and underlined by the new streaming ESPN offer. This will help drive further value and retain customers through a novel bundle,” said analyst Paolo Pescatore of PP Foresight.
In its fiscal third quarter, Disney reported net income of $5.94 billion, up from $2.48 billion in the same quarter a year earlier. That more than doubled expectations of $2.3 billion, according to analysts polled by FactSet.
Much of that gain was attributed to a one-time tax benefit from Disney’s Hulu streaming service.
The company reported adjusted earnings per share of $1.61, up from the $1.43 reported in the same quarter last year. That came in ahead of analysts’ expectations of $1.45 per share.
Revenue for the quarter came in at $23.7 billion, up 2% compared with $23.2 billion the company brought in the third quarter last year, and in line with analysts’ expectations of $23.7 billion, according to FactSet.
Disney shares have traded up 6.3% so far this year, compared with gains recorded by the S&P 500 index SPX of 7.1%, after a 26% swoon in April as investors grew concerned with the company’s exposure to the Trump administration’s tariffs and other economic policies.
Disney shares eased 0.4% in premarket trading.
At its theme parks, Disney reported revenue of $9.1 billion for the quarter, compared with $8.4 billion in the same period last year. That came in well ahead of analysts’ expectations for a decline to $8.2 billion for the segment.
-Lukas I. Alpert
This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
08-06-25 0902ET
Copyright (c) 2025 Dow Jones & Company, Inc.