Disney earned $2.62 billion, or $1.43 a share, for the quarter ended June 29. This comes after a loss of $460 million, or 25 cents a share, in the same period a year ago.
Excluding one-time gains, earnings came to $1.39 per share, beating the $1.20 expected by analysts surveyed by Zacks Investment Research.
The Burbank, California-based company’s sales rose 4 percent to $23.16 billion, beating Wall Street expectations of $22.91 billion.
The company generated $254 million in operating profits from content sales and licensing, buoyed by the strong performance in theaters of Inside Out 2, which is now the highest-grossing animated film of all time.
Disney announced Wednesday that the 2015 original “Inside Out” has attracted more than 1.3 million subscribers to Disney+ and has garnered more than 100 million views worldwide since the first trailer for “Inside Out 2” was released.
The combined streaming business, which includes Disney+, Hulu and ESPN+, turned a profit for the first time, driven by a strong three-month performance from ESPN+ and a better-than-expected quarterly performance from its direct-to-consumer division.
Disney said in May that it expected its overall streaming business to be weaker in the third quarter due to its Indian platform Disney+ Hotstar. The profitable quarter came as a surprise, as the company had expected its combined streaming business to be profitable in the fourth quarter at the time.
The Experiences segment, which includes theme parks, saw revenue increase 3% in the third quarter, and 5% overseas. Domestic theme parks and experiences operating profit fell 6%, while overseas operating profit increased 2%.
Disney said the decline in operating revenue from its domestic theme parks and experiences was due to higher costs from inflation, technology spending and new guest services.
The company warned that the weakening demand seen at its domestic theme parks in the third quarter could continue for the next few quarters. It now expects its Experiences operating profit to decline mid-single digits in the fourth quarter compared to the same period a year ago due to weaker demand at its domestic parks, as well as a softening economic cycle in China and lower attendance at Paris Disneyland due to the impact of the Olympics on normal consumer travel.
Disney now expects full-year adjusted earnings per share to increase 30%.
In April, shareholders rejected a request from activist investor Nelson Peltz to join the company’s board, firmly backing Iger as he tries to revitalize the company after a difficult time.
In June, Disney asked a federal appeals court to dismiss a lawsuit against Florida Governor Ron DeSantis after his appointees approved a deal with the company and set development plans for Walt Disney World for the next 20 years, ending the latest standoff between the two parties.
As part of the 15-year deal, Disney agreed to invest $17 billion in Disney World over the next 20 years, and the District committed to working on infrastructure improvements at the theme park resort properties.
Shares were down slightly before the open of trading on Wednesday.
