Disney Delivers Blockbuster Results

Core Viewpoint - The streaming business is significantly contributing to CEO Bob Iger's turnaround plan for Walt Disney, as evidenced by strong financial performance in Q1 2025, including increased revenue and profitability [1][3]. Financial Performance - Revenue for Q1 2025 reached $24.7 billion, a 5% increase from $23.5 billion in Q1 2024, exceeding expectations [2]. - Earnings per share rose to $1.76, marking a 44% increase from $1.22 in the previous year, also beating expectations [2]. - Cash provided by operations increased by 45%, from $2.2 billion to $3.2 billion [2]. Streaming Business Highlights - The direct-to-consumer segment, which includes Disney+, Hulu, and ESPN, reported a profit of $293 million, a significant turnaround from a loss of $138 million a year ago [4]. - Price increases contributed to revenue growth, while the number of Disney+ and Hulu subscribers showed modest growth despite the hikes [4]. Box Office and Sports Segment - The success of "Moana 2" and a third consecutive quarter of streaming profits contributed to Disney's earnings beat [3]. - The sports segment's operating income increased to $350 million, driven by a 15% rise in domestic ESPN advertising revenue [5]. - However, the parks and experiences segment saw a 5-percentage-point decline in operating income due to hurricane disruptions and cruise ramp-up expenses, with Hurricanes Milton and Helene impacting income by $120 million [5]. Market Reaction and Future Outlook - Following the release of the financial results, Disney shares initially rose by 2% in premarket trading but later gave back some gains [6]. - CEO Iger described the quarter as "a strong start to the fiscal year" and expressed confidence in the company's growth strategy, particularly in the streaming sector [7]. - Investors are keen to hear more about the growth and profitability outlook for the upcoming year [7]. Succession Planning - CEO Iger, at 73 years old, is in his second term and is expected to find his successor by the end of 2026, making any commentary on this process of significant interest to investors [8].