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Excerpt from www.ft.com
Disney shares tumbled 9.5 per cent on Tuesday even as it reported the first profit in its core streaming business since it leapt into a battle with Netflix five years ago.
The Disney+ and Hulu streaming unit earned an operating profit of $47mn in the quarter to the end of March, compared with a $587mn loss a year earlier. Disney achieved the milestone months earlier than expected thanks to cost-cutting and the popularity of Hulu programmes including Shogun and The Bear.
But investors appeared to be more focused on a potential slowdown in the company’s theme parks, which have rebounded strongly since the pandemic restrictions began to lift.
Bob Iger, chief executive, highlighted the quarterly improvement in streaming and its experiences division, where theme parks outside the US, including Shanghai Disney, performed well. “We are turbocharging growth in our experiences business with a number of near- and long-term strategic investments,” he said.
In a call with investors, Hugh Johnston, Disney’s chief financial officer, said higher expenses from the launch of two new cruise ships would limit growth in the current quarter. He also said the post-pandemic travel boom could be running out of steam.
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