Tue, May 7, 2024 at 8:02 PM GMT+9

Disney (DIS) said Tuesday that an important part of its streaming business turned a profit for the first time as the media giant reported fiscal second quarter earnings per share that beat analyst estimates.

The company's direct-to-consumer (DTC) portion of its entertainment segment, which includes Disney+ and Hulu, posted operating income of $47 million, compared to a loss of $587 million in the prior year period.

That doesn't mean all of Disney's streaming services were profitable. Including ESPN+, total direct-to-consumer losses amounted to $18 million versus the $659 million loss reported in the year-earlier period. Disney expects full streaming profitability by the fourth quarter of this year.

Shares moved lower in pre-market trading as investors digested the release.

Over the past year, Disney has been grappling with challenges that include a declining linear TV business, slower growth in its parks business, and profitability hurdles in streaming. But a recent turnaround plan from CEO Bob Iger has investors more bullish in recent months. The company is fresh off a win in a high-profile proxy fight against activist investor Nelson Peltz.

The company reported Q2 adjusted earnings of $1.21 a share — a beat compared with the $1.10 analysts polled by Bloomberg had expected and higher than the $0.93 Disney reported in Q2 2023.

It also raised its guidance for full-year adjusted earnings growth to 25%, up from the prior 20%. However, Disney did take a hit after merging its Star India business with Reliance Industries, reporting an impairment charge of more than $2 billion.

Revenue came in at $22.1 billion, meeting consensus expectations and ahead of the $21.82 billion the company reported in the year-ago period.

The company did warn DTC results in the entertainment segment will be "softer" in the third quarter, driven by losses from its Indian brand Disney+ Hotstar.

Read more details about the results here.

Tue, May 7, 2024 at 7:37 PM GMT+9

Greetings from the Beverly Hills Hilton, home of the Milken conference.

It's 3:24am PT here and the hotel is empty, a different scene from Monday's packed house at noon. You are probably wondering why I am here at this time? Well, we are taping an interview with Disney's (DIS) Hugh Johnston soon right after earnings hit. I have known Hugh for a decade, going back to his long time serving as PepsiCo's (PEP) CFO.

So considering that and my natural inclination to be awake, why not get things popping early! (our live coverage on day two of Milken kicks off at 9am ET on our network, a more normal time)

A couple random thoughts that crept into my head during the inflationary Uber ride to the hotel:

1. Chatted up a source of mine I have known for years who has knowledge of the Bill Gates and Steve Ballmer relationship. Or should I say no relationship — the two apparently haven't talked in years because Steve is a "family man" and doesn't agree with some of Gates' life choices in recent years.

2. If Kevin Hassett has been chosen to be the next Fed chief in Trump presidency round two as the WSJ recently speculated, he didn't show it in an interview with Akiko Fujita and yours truly yesterday afternoon. He actually downplayed it happening further off camera. Then again, who in Trump's inner circle wants to speak out against him in any way — don't bite the hand that feeds you, I suppose.

3. Good thoughts below by Apollo Global Management (APO) CEO Marc Rowan on the college campus protests below. Rowan has been very vocal on the issue.

Note: Apollo is the parent company of Yahoo Finance.

4. Yahoo Finance senior reporter Yasmin Khorram was in the room for a much anticipated main stage interview at Milken with Tesla (TSLA) CEO Elon Musk last night. People were leaving early during the meandering conversation, Khorram reports.