Disney’s media properties are more exciting than its parks | Wilnesh News

Here’s a surprise: disneyThe media business no longer puts pressure on the company.

The dominant narrative for Disney investors since 2022 has been how streaming losses, coupled with declines in its traditional pay-TV business and a string of box office failures, have supported soaring sales and profits at the company’s theme parks and resorts. The result is that the company’s stock price has fallen about 24% over the past two years, while the S&P 500 has gained 28% during the same period.

The company’s second-quarter results showed a shift is taking place. Disney’s combined streaming business – Disney+, Hulu and ESPN+ – posted a quarterly profit for the first time ever, with a profit of $47 million. That’s a significant improvement from a loss of $512 million in the same period last year.

Disney’s theatrical division has also been hot. In recent weeks, “Inside Out” became the highest-grossing animated film of all time. “Deadpool and Wolverine” accepted It grossed $824 million worldwide after two weeks of release. Disney became the first movie company to exceed $3 billion in global box office revenue in 2024.

Meanwhile, Disney’s theme park division reported “consumer demand slowed at the end of the (fiscal) third quarter, exceeding our previous expectations.” That sent the stock down about 3% in early trading.

Disney Chief Executive Bob Iger said on the company’s earnings call that he expects momentum in the media business to only grow. For Wall Street, which wants both growth and profit, this is a great thing.

“We feel very optimistic about the future of this business,” Iger said of streaming. “You can expect it to grow well in fiscal 2025.”

Iger mentioned a planned crackdown on password sharing that will begin “in earnest” in September as a tool to help attract new users and increase revenue for the company. Similar efforts come from Netflix Helped the world’s largest streaming company add new customers last year.

Disney also raised the price of its streaming service in mid-October. Most plans for Disney+, Hulu and ESPN+ cost $1 to $2 more per month.

Iger laid out a list of Disney’s unreleased movies to emphasize the studio’s solid positioning for the remainder of 2024 and beyond.

“Let me read you through the films we will be making and releasing over the next nearly two years,” Iger said. “We have Moana, Mufasa, Captain America, Snow White, Thunderbolt, Fantastic Four, Zootopia, Avatar, The Avengers. , “The Mandalorian” and “Toy Story,” just to name a few, and when you think about not only the box office potential but the potential to drive global streaming value, I think there’s reason to be bullish on where we’re headed.

Disney has not diminished its emphasis on the park. company said last year It plans to invest $60 billion in theme parks and cruise lines over the next decade. But it’s certainly healthier for the company to reassure investors that the media unit isn’t depressing its stock price.

Disney shares fell on Wednesday, possibly as investors focused on the parks. The next step is for the stock price to rise during the quarterly earnings report as investors get excited about the media unit.

WATCH: Watch CNBC’s full interview with Disney CFO Hugh Johnson following earnings