Operating profits from Disney's streaming business jumped in the first three months of 2025, with Disney+ unexpectedly adding 1.4 million subscribers. Chief Bob Iger said that despite the economic storm clouds gathered, Rat House remains “optimistic” about its guidance for the current fiscal year.

Overall, the company reported revenue of $23.62 billion, up 7% for the quarter ended March 29 (Disney’s Q2 fiscal year 2025). Disney's net income was $3.28 billion and a net loss of $20 million in the same period last year, which translates to adjusted earnings per share of $1.41 (a 20% increase). Results - Streaming profits, the driving force behind domestic theme parks and home video sales of "Moana 2" can easily surpass Wall Street expectations.

In fiscal 2025, Disney expects adjusted EPS of $5.75, which will increase by 16% year-on-year. The media group predicts cash provided by $17 billion in operations ($14 billion in fiscal 2024), up $2 billion from previous guidance powered by tax deferrals. Disney also expects operating income in its entertainment and sports sectors to increase by double digits, with operating income in its theme parks and consumer product BIZ rising by 6%-8%.

Even so, Disney said when announcing earnings: “We continue to monitor the potential impact of macroeconomic development on our business and recognize that uncertainty in balances for fiscal year ending in late September 2025 remains in the business environment.”

Iger sounded optimistic in his prepared remarks. “Overall, we are optimistic about the direction of the company and our outlook for the rest of the fiscal year,” he said.

“Our outstanding performance for the quarter – adjusted EPS is 20% driven by the previous year’s entertainment and experience business, which highlights our ongoing success in building growth and execution in strategic priorities,” said Eiger. “After the outstanding first half of the fiscal year, we still have a lot to look forward to, including our upcoming Drama Slate, the launch of ESPN’s new DTC product, and unprecedented expansion projects in our experience.”

Investors will be eager to hear other comments from Iger and other executives about how Disney expects to be affected by President Trump’s aggressive global tariffs, including his vague threats to impose a 100% levy on films produced overseas - and the company’s strategy to face a downturn.

Wall Street analysts average expected revenue for the quarter was $23.14 billion, with adjusted earnings per share of $1.20, according to LSEG Data & Analytics.

Disney previously told the streets that it is expected to have a "moderate decline" for Disney+ subscribers in the March quarter, with analysts predicting an estimated 1.1 million drop in street notes on Disney+ submarines. Instead, the service received 1.4 million, including 1 million in the U.S. and Canada, ending with a record of $126 million. The company attributed Disney+’s subscriber growth to a strong content segment, which included the addition of the blockbuster “Moana 2” and “Mufasa: The Lion King”, as well as the debut of the original series “Daredevil: Regrow”, which generated 7.5 million views in the first five days of its release.

In addition, Hulu Subs rose 1.1 million to 54.7 million in the quarter. Total revenue for Disney+ and Hulu rose 8% to $6.12 billion, partly by higher retail pricing, with operating revenues up more than seven times to $336 million.

Disney's domestic linear TV business, including ABC, fell 3% to $2.2 billion, while operating revenue rose 20% to $625 million. The company said the increase in profitability is due to lower marketing and programming costs for Disney's wired networks due to "fewer new shows" and reduced technology costs. Domestic TV advertising revenue fell in the quarter because of “lower interest rates and less impressed by lower average viewership.” Membership revenue was flat for the quarter, with higher interest rates offsetting the decline in subscribers.

At ESPN, revenue rose 5% to $4.53 billion, while operating revenue fell 16%, due to the costs associated with airing three more college football playoffs and another NFL game. ESPN+ paid subscribers fell by 800,000 to 24.1 million.

As revenue grew 54% to $2.15 billion, content sales/other businesses in Disney's entertainment show fell to $153 million in operating profit (relative to $18 million a year ago). The company said the "carrier-forward" performance for "Moana 2" and "Lion King: Mufasa" were flat from the last quarter of 2024, with results for "Snow White" and "Snow White" and "Captain America: Brave New World" relatively disappointing from the last quarter of 2024. Due to "Moana 2"

Disney's experience sector revenue rose 6% to $8.89 billion, which includes theme parks, cruises, resorts and consumer goods. Total segment operating profit grew 9% to $2.49 billion, domestic parks and experiences grew 13%, and consumer products grew 14%, offsetting the 23% decline in international theme parks.

During the quarter, Disney charged $109 million for unspecified "content barriers."

(Above: Charlie Cox