Disney’s solid third quarter was driven by a US$1 billion box office haul from “Toy Story 5” and the strong draw of U.S. theme parks that helped to offset continued weakness from international tourism. Disney also announced a global short-form content sharing deal with TikTok on Wednesday. The agreement will bring Disney-focused fan-created content from TikTok to the Disney+ app. Shares climbed more than four per cent in early morning trading on Wednesday. The Walt Disney Co. cautioned earlier this year that its theme parks division would likely see modest growth due in part to declining tourism from abroad. International tourism in the U.S. has waned for a number of reasons after U.S. President Donald Trump’s return to the White House, including tariffs, a crackdown on immigrants, and repeated jabs at allied nations. The Experiences division, which includes Disney’s six global theme parks, its cruise line, merchandise and video game licensing, reported that operating income climbed 20 per cent to US$3.02 billion and revenue totaled US$9.97 billion. Operating income rose 27 per cent at domestic parks, while operating income declined 13 per cent for international parks and Experiences. Overall attendance at U.S. parks climbed three per cent from a year ago on an increase in attendance from domestic tourists and annual passholders. The company said the performance was also helped by summer promotions and new experiences being offered at the parks. CEO Josh D’Amaro, during a conference call after the first full quarter he has overseen since taking over for Bob Iger about five months ago, said that spending was also up at domestic parks despite the current economic uncertainty. “The consistent investments that we’ve made over time, combined with the fact that the experience Disney provides to its fans, it’s truly differentiated and highly valued,” he said. The growth in attendance at parks is being driven by U.S. residents, but Disney is also seeing more robust traffic at domestic parks from overseas visitors. D’Amaro became the nineth CEO of the 100 plus-year-old company after overseeing Disney theme parks, cruises and resorts for about six years. Disney got a substantial boost from “Toy Story 5” during the third quarter, which has already pulled in US$1 billion at the box office globally. The film boosted interest in other Toy Story films on Disney+ as well, and Toy Story merchandise sales helped give the company its strongest quarter of year-over-year growth in consumer products revenue in 20 quarters. The company also noted the strong performance of “The Devil Wears Prada 2,” particularly overseas. Revenue for the entertainment streaming business - which includes Disney+ and Hulu - climbed 11 per cent to US$5.53 billion. The results were helped by adding more subscribers, price increases and higher advertising revenue. Disney earned US$2.64 billion, or US$1.51 per share, for the three months ended June 27. It earned US$5.26 billion, or US$2.92 per share, a year ago. Removing one-time charges and benefits, earnings were US$2.06 per share. That easily topped the US$1.86 per share that analysts polled by FactSet predicted. Revenue for the Burbank, California-based company rose seven per cent to US$25.25 billion. Wall Street was looking for US$25.39 billion. Disney said it recorded an approximately US$100 million tariff refund after the Supreme Court struck down some of U.S. President Donald Trump’s most sweeping levies on trade. The company said that it may receive additional refunds in future quarters, but that the monetary amounts are expected to be insignificant. --- Michelle Chapman, The Associated Press
