(qlmbusinessnews.com Thurs. 8th Aug, 2024) London, UK —
“Disney's Financial Turnaround: Inside Out 2 Triumphs, Theme Parks Falter”
The phenomenal success of Disney's Inside Out 2 has significantly boosted the entertainment giant’s profits, though troubles persist elsewhere within the company.
For the three months ending in June, Disney reported a return to pre-tax profit, largely attributed to the Pixar sequel becoming the highest-grossing animated film of all time. Additionally, Disney announced its streaming business had become profitable for the first time.
However, analysts expressed disappointment overall, as revenue from Disney's theme parks fell short of expectations. The Olympics in Paris, where Disneyland Paris is located, were partially blamed for the decline in theme park revenue, alongside a general drop in consumer spending.
Disney also anticipates continued lower demand at its US parks throughout the second half of the year. Media analyst Ben Barringer of Quilter Cheviot suggested these lacklustre results intensify concerns about a potential American economic slowdown, which recently unsettled global stock markets.
Disney faces further challenges as audiences shift away from traditional TV viewing and cinema. In an effort to boost streaming subscriber numbers, the company has been cracking down on password sharing.
Chief executive Bob Iger, who was brought out of retirement to steer the company back on course, still has considerable work ahead, according to Barringer. He indicated that Disney remains in “turnaround mode” and predicted ongoing struggles through the rest of the year.
Part of Disney's difficulties stem from “Disneyland Paris struggling due to the Olympics being in town, as well as China experiencing its own economic issues,” Barringer explained.
Despite these hurdles, Disney is expected to see more “stellar returns” with the release of Deadpool & Wolverine. The Marvel crossover film had an impressive opening weekend in the US, becoming the eighth-biggest opening ever and the best of the year so far.
Robert Fishman, a media analyst at Moffett Nathanson, highlighted that Disney's recent successes, including the highest-grossing animated film and the largest-ever opening for an R-rated film, mark a significant turnaround. However, he cautioned that it remains uncertain whether these successes indicate a sustained return to form. Fishman pointed out that Disney relies heavily on upcoming titles like Moana 2 and Mufasa: The Lion King to draw audiences in the coming months.
While Disney’s streaming business performed well in the US and Canada, its operations in India saw a 6% decline compared to the previous year.
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