Disney Profits Top Estimates on Strength in Theme Park Business

Entertainment giant Disney reported third-quarter profits of US$2.6 billion, topping estimates on the strength of its theme park business.

The figure was about half the level of the year-ago period, which had been boosted by a large one-time tax benefit. Revenues rose 6.8% to US$25.2 billion.

Disney pointed to growth across its "Experiences" business, saying Walt Disney World had a "standout quarter" and that forward bookings at the US theme park in Florida "remain robust".

The parks division had been seen as potentially vulnerable due to inflation that has weighed on consumers. However, the company acknowledged a slowdown in the number of international visitors to its US venues.

Disney scored higher revenues in its entertainment business behind growth in streaming subscriptions. While the company praised the box office performance of "Toy Story 5" and "The Devil Wears Prada 2", both "Star Wars: The Mandalorian" and "Gorgu" underperformed.

Disney nevertheless cited upside in theme park attendance and retail products built around those franchises.

In its sports division, Disney saw a bigger operating profit decline than it previously forecast due to four-game sweeps in the NBA basketball playoffs. Results were also dented by higher sports rights costs.

In parallel with the earnings, Disney announced a new venture with TikTok that will allow fans and creators to use Disney content to make short videos to be broadcast on both TikTok and Disney's streaming platform.

Disney said in a statement it will make available Marvel, Star Wars and other content comprising "memorable scenes and moments from Disney movies and shows".

The agreement will "pilot in the US in the coming months with the intention of other markets to follow".

Shares of Disney rose 3.8% in pre-market trading.