Disney (DIS) on Wednesday reported that its total streaming division turned a profit for the first time, though weakness in its parks division dented an otherwise positive report, with the company noting a "moderation of consumer demand" towards the end of the quarter.
In Disney's fiscal third quarter, its direct-to-consumer (DTC) streaming business, which includes Disney+, Hulu, and ESPN+, posted operating income of $47 million, compared to a loss of $512 million in the prior-year period. The company had previously expected to achieve total streaming profitability by the current quarter.
Overall, the company reported Q3 adjusted earnings of $1.39 per share, above the $1.19 analysts polled by Bloomberg had expected and higher than the $1.03 Disney reported in the prior-year period.
Revenue came in at $23.2 billion, exceeding consensus expectations for $23.1 billion and higher than the $22.3 billion reported in the year-ago period.
Disney also raised its guidance for full-year adjusted earnings growth to 30%, up from the prior 25%.
Disney stock rose as much as 3% in premarket trade on Wednesday before forfeiting these gains. Coming into the report, Disney stock was roughly unchanged this year.
Looking ahead, Disney said it remains on track for streaming profitability to improve in the fourth quarter, with both DTC entertainment (which posted a loss of $19 million in Q3) and ESPN+ expected to be profitable.
"We continue to feel optimistic about our trajectory, with multiple building blocks for improving margins over the coming years," the company said in the release.
One of those building blocks will be new price hikes for these services. On Tuesday, the company announced it would again raise prices across its Disney+ and Hulu plans, with these changes set to take effect in October.
The parks business was Disney's main disappointment in the quarter, with domestic operating income dropping 6% from the prior year to $1.35 billion. The company warned demand moderation could continue over "the next few quarters."
The company added that Disneyland Paris will be impacted by a reduction in normal consumer demand trends due to the Olympics, along with some cyclical softening in China. The company said it continues to see "strong" demand for its cruises.
Read more about the results here.