NEW YORK -- Disney said its Disney Plus streaming service reached nearly 29 million paid subscribers in less than three months, an impressive start for what the company has positioned as its future as more people drop cable subscriptions.
But the Walt Disney Co. said profit fell 23% in its latest quarter to $2.13 billion as it absorbed expenses from starting up the new service.
On a per-share basis, profit came to $1.17 per share. Adjusted for one-time items, earnings came to $1.53 per share. Analysts polled by FactSet expected earnings of $1.46.
Revenue rose 36% to $20.9 billion. Wall Street expected revenue of $20.7 billion.
Disney shares rose 1.2% in after-hours trading to $146.50.
Revenue slid at Disney's cable networks division, by 20% to $4.8 billion. It said ESPN weighed on its profit because of higher programming and production costs and lower ad revenue as viewers decline.
The broadcasting arm's revenue rose 34% to $2.6 billion, while the parks division's sales rose 8% to $7.4 billion and the movie business more than doubled to $3.8 billion thanks to “Frozen II” and “Star Wars: The Rise of Skywalker" in theaters.
The direct-to-consumer business that includes Disney Plus posted revenue of $4 billion, up from $918 million a year ago, while its operating loss widened to $693 million from $136 million.