Disney (DIS) reported Wednesday that its streaming division turned a profit for the first time, though weakness in its theme parks division weighed on an otherwise positive report as the company noted “moderation in consumer demand” toward the end of the quarter.
In Disney’s fiscal third quarter, its direct-to-consumer (DTC) streaming business, which includes Disney+, Hulu and ESPN+, reported operating income of $47 million, compared to a loss of $512 million in the year-ago period. The company had previously expected to reach overall profitability from streaming by the current quarter.
Overall, the company reported adjusted third-quarter earnings of $1.39 per share, higher than the $1.19 analysts surveyed by Bloomberg had expected and higher than the $1.03 Disney reported in the same period a year earlier.
Revenue came in at $23.2 billion, beating consensus expectations of $23.1 billion but down from $22.3 billion in the year-ago period.
Disney also raised its full-year adjusted earnings growth forecast to 30%, up from 25% previously.
Disney shares rose about 3% in premarket trading Wednesday before paring those gains. By the time of the report, Disney’s stock was roughly unchanged this year.
Looking ahead, Disney said it remains on track to improve streaming profitability in the fourth quarter with both DTC entertainment, which reported a $19 million loss in the third quarter, and ESPN+ expected to be profitable.
“We continue to feel optimistic about our trajectory, with several key pillars in place to improve margins over the coming years,” the company said in the statement.
Among these key elements is the new price increase for these services. On Tuesday, the company announced And announced that it will raise prices again. Across Disney+ and Hulu, these changes are set to go into effect in October.
Disney’s theme park business was the main disappointment for the quarter, with domestic operating income down 6% from a year earlier to $1.35 billion. The company warned that slowing demand could continue over the “next few quarters.”
The company added that Disneyland Paris will be impacted by lower natural consumer demand trends due to the Olympics, along with some cyclical downturn in China. The company said it still sees “strong” demand for its cruises.
Read more about the results here.
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