Disney's streaming business turns a profit in first financial report since challenge to Iger

The Walt Disney Co. swung to a loss in its second quarter because of restructuring and impairment charges, but its adjusted profit topped expectations and its streaming business turned a profit. Theme parks also continued to do well and the company boosted its outlook for the year.

While Disney said Tuesday that it foresees its overall streaming business softening in the current quarter due to its platform in India, Disney+Hotstar, it expects its combined streaming businesses to be profitable in the fourth quarter and to be a meaningful future growth driver for the company, with further improvements in profitability in fiscal 2025.

The direct-to-consumer business, which includes Disney+ and Hulu, posted quarterly operating income of $47 million compared with a loss of $587 million a year earlier. Revenue rose 13% to $5.64 billion.

For the combined streaming businesses, which includes Disney+, Hulu and ESPN+, second-quarter operating loss shrunk to $18 million from $659 million, while revenue improved to $6.19 billion from $5.51 billion.

Disney+ core subscribers climbed by more than 6% in the second quarter.

Yet the improved picture for Disney on streaming arrives with its cable business in decline. That segment saw revenue slide 8% in the most recent quarter.

“Looking at our company as a whole, it’s clear that the turnaround and growth initiatives we set in motion last year have continued to yield positive results,” CEO Bob Iger said in a prepared statement.

Speaking during Disney’s conference call, Iger said that the company plans to add an ESPN tab to Disney+ by the end of the year, a maneuver that was previously made with Hulu. This will give U.S. subscribers access to some live sports and studio programming within the Disney+ app.

ESPN, Fox and Warner Bros. Discovery announced plans in February to launch a sports streaming platform in the fall that will include offerings from at least 15 networks and all four major professional sports leagues.

Iger also said that next month the company will start cracking down on password sharing for its streaming service in some markets, and will expand that crackdown globally in September.

While Disney has quality