Disney Parks Hit Record $10 Billion Quarter as Iger's Exit Looms, Despite Streaming Surge
Disney's theme parks and cruise lines powered the entertainment giant to a record-setting quarter, even as the company braces for a potential slowdown in its core U.S. market and prepares for a pivotal leadership change.
The company's Experiences division, encompassing its global parks and resorts, delivered a historic $10.0 billion in revenue for the quarter ended December 31. Operating income at U.S. parks like Disney World grew 8%, driven by a 4% rise in per-guest spending. The cruise line also saw robust performance with the addition of the new Disney Destiny.
However, Disney cautioned that growth in this segment is likely to be "modest" in the current quarter, citing headwinds from weakening demand among international visitors to U.S. destinations. This aligns with U.S. Commerce Department data showing an 8-month streak of declining foreign tourist entries.
In streaming, the combined operating income for Disney+ and Hulu skyrocketed 72% year-over-year to $450 million, far exceeding analyst forecasts. The surge is largely credited to recent price increases, as Disney, like Netflix, has stopped reporting raw subscriber counts.
Contrasting this success, the broader Entertainment segment saw operating income fall 35% to $1.1 billion. Soaring production and marketing costs for its studios overshadowed box office wins from Zootopia 2—which set a record in China—and Avatar: Fire and Ash.
The quarterly report arrives amid intense speculation over the succession plan for CEO Bob Iger. Reports suggest he could outline his departure timeline as soon as this week, with his exit expected by year-end. Iger, who returned to the helm in late 2022 after his successor's ouster, is reportedly mentoring internal candidates, with parks chief Josh D'Amaro seen as a frontrunner.
"Our strong performance this quarter, particularly in our parks and streaming businesses, demonstrates the resilience of our brands," Iger stated, expressing optimism for upcoming film releases.
Reader Reactions:
Michael R., Orlando, FL (Theme Park Annual Pass Holder): "The parks are packed and they're charging more than ever. This 'slowdown' warning feels like setting up an excuse for future price hikes. The magic is becoming unaffordable."
Priya Chen, Media Analyst at Brighton Insights: "The streaming profitability turnaround is the real story here. It shows Disney's pivot to prioritizing margins over subscriber growth at all costs is finally paying off. The parks' volatility is a near-term concern, but the foundational business is solid."
David L., Former Cast Member: "Iger's second act was about stabilization. Getting streaming profitable and parks back on track was the job. Now, handing over a company that's on firmer footing than in 2022 is a logical time to pass the baton. The succession plan will be his final, most critical test."
Sarah Torres, Investment Blogger at 'The Daily Yield': "A 6% drop in net profit with all these 'record' revenues? Something doesn't add up. The stock drop tells the real story—investors are nervous about the CEO search and whether this parks growth is a last hurrah before consumer spending cracks."