Disney reported higher revenues for its fiscal third quarter to 3 July, helped by the reopening of its parks and resorts and especially growth at its direct-to-consumer business. The company ended the quarter with nearly 174 million subscriptions across Disney+, ESPN+ and Hulu.
Revenues for the group jumped 45 percent from the year before to USD 17.02 billion, ending declines caused by covid-19 lockdowns. The net result from continuing operations went to a profit of USD 923 million from a loss of 4.718 billion. The operating cash flow improved to USD 1.46 billion from 1.16 billion and the free cash flow gained 16 percent to USD 528 million.
Theme parks and resorts resumed operations in May and June, but some theatrical releases have still been shortened or canceled. The company continued to experience disruptions in the production and availability of content, including live sports programming. Film and television production, suspended in March 2020, started again in parts at the beginning of the company’s fourth quarter but delays and disruptions are still widespread. Extra costs associated with the extra safety of employees, talent and guests are expected at USD 1 billion for this fiscal year. Some of these expenses may be capitalized and amortised over future periods, Disney said.
Revenues at Disney Media and Entertainment Distribution lifted 18 percent to USD 12.68 billion, driven by Direct-to-Consumer, where revenues leaped 57 percent to USD 4.26 billion. At Linear Networks, revenues went up by 16 percent to USD 6.95 billion. The figure includes USD 5.56 billion in revenue from domestic channels, up 13 percent, and USD 1.39 billion from international channels, an increase of 29 percent.
Hulu results did better on the back of subscription revenue growth and higher advertising revenue. At Disney+, the increase in subscribers was largely offset by higher programming and production, marketing and technology costs, plus expenses for launches in additional markets.
Disney+ had 116.0 million paid subscribers at 3 July, up from 103.6 million in the previous quarter and 57.5 million the year earlier. At ESPN+, subscriber numbers advanced to 14.9 million from 13.5 million in Q2 and 8.5 million the year before. At Hulu, the number of subscribers climbed to 42.8 million from 41.6 million quarter-on-quarter and 35.5 million year-on-year.
