In a Surprise, Disney+ Becomes Profitable

When Disney reported robust earnings in February, the activist investors then circling the company essentially called it a stunt — a temporary, heat-of-battle effort to fend them off and not, as Robert A. Iger maintained, proof that a struggling Disney had finally “turned the corner.”

The Disney chief’s argument just got a lot stronger.

Disney blew past Wall Street’s expectations for a second consecutive quarter on Tuesday, in part because its flagship streaming service made money — a first. Disney+ had been expected to lose more than $100 million in the most recent quarter, widening losses since its 2019 arrival to roughly $12 billion. Instead, it swung to a $47 million profit.

“Two quarters earlier than expected,” Hugh Johnston, Disney’s chief financial officer, noted by phone. The company had previously predicted that Disney+ would become profitable in September; some investors and analysts have been skeptical about that, putting downward pressure on Disney shares.

Disney’s per-share earnings for the most recent quarter rose 30 percent increase from a year ago. Revenue inched up 1 percent, to $22.1 billion.

Disney beat analyst expectations for per-share earnings by 10 percent. The company matched expectations for revenue.

In the quarter, Disney+ added 6.3 million subscriptions worldwide (excluding India), bringing its total to 117.6 million. Average revenue per paid subscriber climbed 6 percent, to $7.28.