Walt Disney Co.’s adjusted earnings in its second quarter beat expectations and its streaming business turned a profit.

Walt Disney Co. suffered a loss in its second quarter due to restructuring and impairment charges, but its adjusted earnings beat expectations and its streaming business turned a profit. Theme parks also continued to perform well and the company improved its outlook for the year.

While Disney said Tuesday that it expects its overall streaming business to weaken in the current quarter due to its platform in India, Disney+Hotstar, it expects its combined streaming businesses to be profitable in the fourth quarter and be a major driver of future growth for the company, with further improvements in profitability in fiscal 2025.

The direct-to-consumer business, which includes Disney+ and Hulu, posted quarterly operating income of $47 million compared to a loss of $587 million a year earlier. Revenue rose 13% to $5.64 billion.

For the combined streaming businesses, which include Disney+, Hulu and ESPN+, second-quarter operating loss narrowed to $18 million from $659 million, while revenue improved to $6.19 billion from $5.51 billion.

Disney+ core subscribers increased more than 6% in the second quarter.

However, Disney’s improving outlook for streaming comes with its cable business in decline. That segment saw an 8% revenue decline in the most recent quarter.

“Looking at our company as a whole, it’s clear that the recovery and growth initiatives we put in place last year have continued to deliver positive results,” CEO Bob Iger said in a prepared statement.

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ESPN, Fox and Warner Bros. Discovery announced plans in February to launch a sports streaming platform in the fall that will include offerings from at least 15 networks and the four major professional sports leagues.

Iger also said that next month the company will begin cracking down on password sharing for its online streaming service in some markets, and will expand that crackdown globally in September.

It is the first financial report since shareholders rejected activist investor Nelson Peltz’s efforts to claim seats on the company’s board of directors last month, firmly supporting Iger as he tries to revitalize the company after a difficult period.

Thomas Monteiro, senior analyst at Investing.com, said some Disney investors may have expected more from the quarterly report, but that “the company has tilted its operations toward its core business model, which is more conservative in nature.”

Monteiro focused on the company’s efforts to make its streaming division profitable.

“The big surprise of the day came on the streaming front, which finally managed to turn a profit, well ahead of predictions, in the midst of Hollywood’s massive strike period,” Monteiro said. “This indicates that perhaps the more global, low-cost Netflix-like production model is likely the way forward for an operation that needs to rethink its growth expectations as a whole.”

Revenue at Disney’s domestic theme parks increased 7%, while its overseas theme parks reported a 29% increase.

But Disney acknowledged that it had to deal with higher costs at its theme parks during the quarter due to inflation.

The company said there was an increase in spending by Walt Disney World visitors due to higher ticket prices, while Disneyland visitors increased their spending due to an increase in ticket prices and fares. the hotel rooms.

Overseas, Hong Kong Disneyland benefited from the November opening of World of Frozen, a section of the park that includes attractions based on the popular “Frozen” films.

Like many tourist destinations, Disney continues to adapt to post-pandemic travel.

“While consumers continue to travel in record numbers and we still see healthy demand, we are seeing some evidence of a global moderation from the post-Covid travel peak,” Chief Financial Officer Hugh Johnston said during the call.

During the period ending March 30, Disney lost $20 million, or a penny per share. That compares with a profit of $1.27 billion, or 69 cents per share, a year ago.

Restructuring and impairment charges rose to $2.05 billion from $152 million in the prior-year period.

Adjusted earnings, which excluded charges and other items, were $1.21 per share, easily beating the $1.12 per share predicted by analysts surveyed by Zacks Investment Research.

The Burbank, California, company’s revenue rose to $22.08 billion from $21.82 billion a year earlier, but was slightly below Wall Street estimates of $22.13 billion.

Content sales and licensing revenue fell 40% as Disney did not release any significant movie titles during the second quarter compared to the prior-year period, which included the release of “Ant-Man and the Wasp: Quantumania.” . The prior year’s results were also helped by the continued performance of “Avatar: The Way of Water,” which premiered in December 2022.

Shares fell more than 10% on Tuesday.

In February, The Walt Disney Co. said it was making “significant cost reductions” and reduced its selling, general and other operating expenses by $500 million in its first quarter. The company will eliminate thousands of jobs in 2023.

In March, allies of Gov. Ron DeSantis and Disney reached a settlement in a state court dispute over how Walt Disney World will be developed in the future following the Florida governor’s governance takeover of the theme park.

Last month, Disneyland performers in California and the union that organizes them, the Actors’ Equity Association, said they had filed a petition seeking union recognition.

Walt Disney Co. is the parent company of this station.