Walt Disney (NYSE:DIS) reported third-quarter earnings that surpassed analyst expectations, driven by strong performance in its Entertainment segment. However, shares fell 2.5% in after-hours trading as the company warned of softening demand in its Experiences segment.
Disney posted adjusted earnings per share of $1.39, beating the analyst estimate of $1.20. Revenue for the quarter came in at $23.2 billion, slightly above the consensus estimate of $23.08 billion and up 4% YoY.
The Entertainment segment was a standout performer, with operating income nearly tripling YoY. This was largely due to improved results in Direct-to-Consumer and Content Sales/Licensing. Notably, Disney achieved profitability across its combined streaming businesses for the first time, a quarter ahead of previous guidance.
"Our performance in Q3 demonstrates the progress we've made against our four strategic priorities across our creative studios, streaming, sports, and Experiences businesses," said CEO Robert Iger.
Despite the strong overall results, Disney warned of moderating consumer demand in its Experiences segment, which could impact the next few quarters. The company expects Q4 Experiences segment operating income to decline by mid-single digits versus the prior year.
Disney now sees its full-year adjusted EPS growth target at 30%, citing strong consolidated financial performance in the third quarter.
The company also noted the success of "Inside Out 2," which became the highest-grossing animated film of all time, demonstrating the renewed creative strength of its studios.