Disney (DIS) reported on Wednesday that its streaming division had made a profit for the first time. However, weakness in the parks division clouded the otherwise positive report. The company noted a “weakening in consumer demand” towards the end of the quarter.
In the third fiscal quarter, Disney’s direct-to-consumer (DTC) streaming business, which includes Disney+, Hulu and ESPN+, reported an operating profit of $47 million, compared to a loss of $512 million in the same period last year. The company had previously expected to achieve full profitability in the streaming business in the current quarter.
Overall, the company reported adjusted earnings of $1.39 per share for the third quarter, above analyst expectations of $1.19 surveyed by Bloomberg and above the $1.03 Disney reported in the same period last year.
Revenue was $23.2 billion, beating the consensus forecast of $23.1 billion and higher than the $22.3 billion reported in the year-ago period.
Disney also raised its forecast for full-year adjusted earnings growth to 30% from 25%.
Disney shares rose as much as 3% in premarket trading on Wednesday before giving up those gains. Before the report was released, Disney shares were largely flat this year.
Looking ahead, Disney said the company remains on track to increase profitability in its streaming business in the fourth quarter, with both DTC Entertainment (which posted a $19 million loss in the third quarter) and ESPN+ expected to be profitable.
“We remain optimistic about our development and see several building blocks for improving margins in the coming years,” the company said in a press release.
One of those building blocks will be new price increases for those services. On Tuesday, the company announced that it would raise prices again for its Disney+ and Hulu plans, with those changes set to take effect in October.
The parks business was Disney’s biggest disappointment in the quarter, with domestic operating profit falling 6% year-over-year to $1.35 billion. The company warned that the slowdown in demand could continue “in the coming quarters.”
The company added that Disneyland Paris will be affected by a decline in normal consumer demand due to the Olympics, as well as some economic slowdown in China. The company said it continues to see “strong” demand for its cruises.
You can find more about the results here.
