‘Inside Out 2’, ‘Deadpool & Wolverine’ Buoy Disney Quarter As Streaming Profits Grow, Disney+ Adds 4.4 Million Subscribers

Disney 's latest quarter was mixed but solid with a big upswing in studio profit led by Deadpool & Wolverine and Inside Out 2 , the top two movies of 2024 to date. At a complex time for media and a company with many moving parts, streaming was in the black and domestic theme parks saw operating income rise.

All in, Disney's fiscal fourth quarter ended in September saw revenue rise 6% from the year before to about $22.57 billion, beating Wall Street forecasts, and operating income grew 23% to $3.65 billion.

The stock is up over 6% premarket trade after the numbers.

, which houses content, streaming and linear television, saw operating income surge to $1.1 billion from $236 million on revenue up 14% at $10.8 billion. Pixar's Inside Out 2 and Marvel's Deadpool & Wolverine broke numerous box office records and helped drive $316 million in operating income.

"Our solid performance in the fiscal fourth quarter reflected the success of our strategic efforts to improve quality, innovation, efficiency, and value creation," said CEO Bob Iger . "In Q4 we saw one of the best quarters in the history of our film studio, improved profitability in our streaming businesses, a record-breaking 60 Emmy Awards for the company, the continued power of live sports, and the unveiling of an impressive collection of new projects coming to our Experiences segment."

saw Disney ending the quarter with 174 million Disney+ core and Hulu subscriptions, and more than 120 million Disney+ core paid subscribers, an increase of 4.4 million over the prior quarter. Streaming swung to a $253 million profit from a $420-million loss the year earlier, and from $19 million in red ink for the previous quarter ended in June.

Hulu ended September with 47.4 million subs, up slightly. Hulu + Live TV stood at 4.6 million subs, up from 4.4 million in June. Disney is buying out Hulu from partner Comcast and has already paid out an agreed upon $8.6 billion floor amount. They are still hashing out how much more is due.

Streaming revenue rose 15% to $5.78 billion. Ad sales rose 14%. Disney cited gains from subscription price hikes and lower marketing costs.

Combining Disney+ and Hulu with ESPN+ from the Sports segment, total DTC revenue rose 13% and there was a profit for the second consecutive quarter — of $321 million, after a positive $47 million in June driven by ESPN+. The trio lost $387 million in the 2023 third quarter.

Disney early this year agreed t o merge its Star India streaming operation with Reliance in an $8.5 billion deal.

The pressing question with streaming — for Disney and other traditional media — is how soon, and if, it can be profitable enough to offset declines in linear television.

revenue was flat at $3.9 billion. Operating income slipped 5% to $929 million. Domestic ESPN advertising revenue in Q4 grew 7% from the prior-year quarter.

Disney will debut a stand-alone ESPN+ streaming service in 2025, something Iger will likely be asked about on a call with analysts set for 8:30 am ET, along with its challenged Venu sports streaming joint venture with Fox and Warner Bros. Discovery that Fubo has sued to block and whose fate is in the hands of a New York court.

Also of interest, the outlook on streaming, the timing of a theme park rebound, Disney's new NBA contract , its film slate and, of course, succession. The board led by James Gorman is looking for Disney's new CEO, eyeing both internal and external candidates . Iger's contract expires at the end of 2026.

revenue nosed up 1% to $8.2 billion with operating income of $1.6 billion, down 6% from the year before.

Domestic parks' operating income rose in Q4 on comparable attendance to the prior-year quarter, Disney said, driven by higher guest spending, partially offset by higher expenses and costs related to new offerings by Disney Cruise Line. International Parks & Experiences operating income declined. The company didn't name locations but had said last quarter that it expected the Paris Olympics would impact Disneyland Paris.

U.S. parks in particular have had a hiccup this year as frenzied post-Covid attendance began to moderate. Wall Street was quite alarmed but has settled into wariness at the dynamic that's rattled one of Disney's most reliable growth drivers.

Also, what happens when NBCUniversal's new, massive Epic Universe theme park opens in May next year in Orlando across town from Walt Disney World ? Iger has said it's fine. Disney itself is in the midst of a multi-year, $10 billion investment cycle in its parks. Universal has also noted dips in attendance at its parks this year.

Linear networks, part of the Entertainment division, saw revenue dip 6% to $2.46 billion with operating income of $498 million, falling 38%. Domestic networks were squeezed by higher marketing costs from more season premieres this year due to Hollywood strikes in 2023. Affiliate and advertising revenue fell on fewer subscribers.

Disney also cited "the impact of the non-renewal of carriage of certain networks by an affiliate." It did not specify, but a renewal with Charter in September of 2023 trimmed out a handful of networks including Baby TV, Disney Junior, Disney XD, Freeform, FXM, FXX, Nat Geo Wild and Nat Geo Mundo.

Disney took $1.5 billion in restructuring and impairment charges, including $69 million for severance. It's been rough. Media companies have been aggressively tossing out staffers to streamline as the entertainment industry shifts and contracts.

"This was a pivotal and successful year for The Walt Disney Company, and thanks to the significant progress we've made, we have emerged from a period of considerable challenges and disruption well positioned for growth and optimistic about our future," Iger said.

"As a result of our strategies and our focus on managing our businesses for both the near- and long-term, we are differentiating ourselves from traditional competitors, leveraging the deepest and broadest set of entertainment assets in the industry to drive attractive returns and further advance our goals."