Disney kicks off Josh D’Amaro era with strong quarterly results amid streaming boom

Disney delivered impressive outcomes for its fiscal second quarter on Wednesday, starting the Josh D’Amaro era with a major success.

The overall revenue saw a 7% rise compared to the same period last year, nearly reaching $25.2 billion.

Earnings per share, aside from specific items, were reported at $1.57. Both of these exceeded the predictions of Wall Street analysts.

The firm's entertainment streaming division experienced an 88% rise in operating income, amounting to $582 million.

The growth was attributed to an increase in subscribers, higher prices, and more advertisements resulting from the release of major titles like Zootopia 2, which transitioned from a $1.9 billion theater success to Disney+ in March.

This quarter marks the first under D’Amaro's leadership as CEO. Having been a long-standing executive, he previously led Disney’s Experiences division before being chosen in February to succeed Bob Iger in the top role following a well-watched succession process.

Besides his comments at the company’s annual shareholder meeting, the quarterly earnings call scheduled later on Wednesday was set to give D’Amaro his first chance to discuss his strategic objectives with Wall Street experts.

He further outlined aspects of his strategic vision in a letter to shareholders that accompanied the financial results.

The letter outlined three primary strategic goals: investing in intellectual property; enhancing customer outreach and interaction; and embracing technology.

“Disney’s unique competitive advantage lies in our power to create characters, tales, and franchises that build lasting connections with audiences globally,” D’Amaro and CFO Hugh Johnston expressed in the letter. “We connect with these audiences through streaming, cinema, sports, consumer products, experiences, and games. A single creative investment can develop into a long-term relationship - bridging platforms, regions, and generations. We believe these advantages support enduring earnings growth and cash flow generation.”

Entertainment revenue rose by 10% to $11.7 billion, while operating income increased by 6% to $1.336 billion. Subscription and affiliate revenues went up by 14% relative to the same quarter in the previous year.

Disney Entertainment advertising revenues grew nearly 5% compared to the year before, with the Fubo deal adding more than 1%.

“This growth indicates our rising streaming revenues more than offsetting our reducing linear revenues,” the company stated in its earnings report.

“We currently gain more Entertainment subscription and affiliate fees and advertising revenue from SVOD than linear TV,” the report continued, with the company predicting “the transition from linear to streaming will persist.”

Zootopia 2 broke records, achieving $1.9 billion globally at the box office, with the excitement around the sequel and its availability catapulting the franchise beyond 1 billion hours of viewing on Disney+.