The Walt Disney Co. reported its strongest sales and profit since before the COVID-19 pandemic began on Thursday, sending shares 5% higher in late trading.
reported fiscal third-quarter net income of $918 million, or 50 cents a share, compared with a loss of $2.61 a share in the year-ago quarter. After adjusting for restructuring costs, amortization and other effects, the company reported earnings of 80 cents a share, compared with 8 cents a share a year ago. Revenue improved to $17.02 billion from $11.78 billion a year ago.
Analysts surveyed by FactSet had expected adjusted net income of 55 cents a share on revenue of $16.8 billion. Shares jumped 5% in after-hours trading Thursday following the release of the results, after gaining 0.7% to $179.29 in the regular session.
Most of the focus during the COVID-19 pandemic has been on Disney’s streaming efforts. Disney+ subscribers increased to 116 million after Chief Executive Bob Chapek revealed it had reached 100 million milestone at the company’s annual shareholder meeting in March. Analysts on average expected 115.2 million subscribers at the end of the quarter, according to FactSet.
“We ended the third quarter in a strong position, and are pleased with the company’s trajectory as we grow our businesses amidst the ongoing challenges of the pandemic,” Chapek said in a statement announcing the results.
The streaming segment, which also includes international products, hauled in $4.26 billion in revenue, in line with analysts’ forecasts of $4.27 billion on average.
Disney had hoped that its theatrical and theme-park segments would bounce back as pandemic-related closures and limitations ended, but the spreading Delta variant could hamper any rebound. Disney’s theme parks and product sales segment reported $4.34 billion in revenue as it slowly reopened in the U.S. and abroad, a spike from $1.07 billion a year ago. The average analyst estimate was $3.9 billion.
Read more: Disney faces more doubts as Delta variant prolongs pandemic fears
The movie business has adapted to the new reality, offering new releases for sale on Disney+ for an extra fee at the same time the movies go into theaters, but that has led to a fight with Marvel star Scarlett Johansson. Analysts have wondered if Disney will delay any coming releases to avoid having to rely on streaming instead of box-office revenue, as Sony Pictures did with a Marvel-affiliated movie earlier Thursday, a sequel to “Venom.”
The company’s theatrical segment, which also includes home-entertainment sales and licensing of content, reported revenue of $1.7 billion, down 23% from last year and trailing the average analyst estimate of $2.07 billion. “Cruella” was the only major new movie Disney launched in the quarter.
Disney’s largest segment by sales was its television networks, such as ESPN and ABC. That segment reported sales of $6.96 billion, up from $6.01 billion a year ago and topping the average analyst estimate of $6.65 billion.
Disney’s shares are down 2% so far in 2021. The broader S&P 500 index
has gained 18% this year.