Shares of Walt Disney (DIS 4.88%) were moving higher this afternoon as the latest earnings report from the entertainment giant showed it making progress on its streaming business and it announced another price hike on its streaming services.
While the headline results were mixed, that momentum was enough to give the stock a lift and shares were up 5.4% as of 3 p.m. ET.
In its fiscal third-quarter earnings report, revenue increased 4% to $22.3 billion, which was slightly short of the consensus at $22.5 billion.
Segment operating income, which excludes charges like $2.65 billion for restructuring and impairments, was flat at $3.56 billion. Its media and entertainment division saw revenue fall 1% to $14 billion and operating income was down 18% to $1.13 billion. Performance at the parks, experiences, and products division was stronger with revenue up 13% to $8.32 billion and operating income rising 11% to $2.4 billion.
Direct-to-consumer revenue was up 9% to $5.5 billion and losses in that segment improved from $1.06 billion in the quarter a year ago to $512 million, which was better than expected. Revenue and profits fell at linear networks, which include broadcast and cable TV.
The company added 800,000 Disney+ core subscribers to reach 105.7 million, which excludes the Disney+ Hotstar subscription, showing modest growth.
On the bottom line, adjusted earnings per share fell 6% to $1.03, which topped estimates at $0.95.
CEO Bob Iger said, “Our results this quarter are reflective of what we’ve accomplished through the unprecedented transformation we’re undertaking at Disney to restructure the company, improve efficiencies, and restore creativity to the center of our business.”
On the earnings call, management said it plans to raise prices again on its streaming services, lifting the price on ad-free Disney from $11 to $14, while the ad-free version of Hulu will increase 20% to $18.
Investors seemed to cheer that move and the narrower-than-expected losses in the streaming segment, which is the future of its entertainment business.
While the company still faces challenges in the transition to a streaming-first business, it seems to be making progress ahead of schedule. That was enough to give the stock a boost as shares were already trading near 52-week lows.