The streaming division of Walt Disney Company achieved better-than-expected results which led the company to increase its annual profit outlook. The company achieved a 16% increase in adjusted earnings per share which reached $1.61 during the fiscal third quarter exceeding the predicted $1.47.
The company uses streaming as its main growth strategy by launching ESPN as a $29.99-per-month service on August 21 which will show NFL and NBA games. The company obtained exclusive WWE wrestling event rights through a new agreement while also announcing an NFL partnership that grants the league a 10% ownership stake in ESPN.
CEO Bob Iger stated that the ESPN launch together with Hulu integration and NFL deal will establish a “truly differentiated streaming proposition.” The combined subscriber base of Disney+ and Hulu reached 183 million through 2.6 million new additions which resulted in a 6% revenue increase for direct-to-consumer services and turned the unit into a $346 million profitable segment from its previous year loss.
The domestic operations of Parks generated a 22% increase in revenue which reached $2.5 billion despite new competition in Orlando. The entertainment division experienced a 15% decline in operating income because traditional TV performance weakened and the absence of last year’s “Inside Out 2” revenue boost. The company increased its annual adjusted EPS forecast to $5.85 from its previous prediction of $5.75.
