Disney achieved robust profits and revenue in the second quarter, driven by flourishing domestic theme parks and the addition of over a million subscribers to its streaming service.

The company also elevated its profit projections for the year, causing shares to surge by 11% on Wednesday.

Disney has also unveiled its intentions to establish a seventh theme park in Abu Dhabi.

In the first quarter of this year, ending on March 30th, Disney reported a profit of $3.28 billion, equating to $1.81 for each share. This contrasts sharply with the same period last year, when the Burbank-based corporation experienced a net loss of $20 million, equivalent to one cent per share.

Excluding one-off charges or gains, earnings reached $1.45 per share, significantly exceeding the $1.18 anticipated by Wall Street, based on a Zacks Investment Research survey.

Revenue experienced a 7% increase, reaching $23.62 billion, and also exceeded expectations.

Income for Disney Entertainment, encompassing the corporation's film production units and streaming platform, rose by nine per cent, whereas income for the Experiences division, comprising its theme parks, grew by six per cent.

Recent cinematic successes feature titles such as “Moana 2” and “Mufasa: The Lion King,” with their latest production, “Thunderbolts,” presently dominating the box office. CEO Bob Iger and Chief Financial Officer Hugh Johnston conveyed in pre-written statements their certainty regarding the current year's film lineup, which comprises “Lilo & Stitch,” “The Fantastic Four: First Steps,” and “Avatar: Fire and Ash.”

However, Disney confronts potential repercussions stemming from the trade dispute initiated by President Donald Trump. Other American corporations have observed adverse consumer reactions in international markets, and on Monday, Trump escalated his tariff conflict by targeting films produced outside the U.S.

Currently, Disney's streaming division is experiencing continued expansion. Its direct-to-consumer segment, encompassing Disney+ and Hulu, reported a quarterly operating profit of $336 million, a significant increase from the $47 million earned in the corresponding period of the previous year. Revenues saw an 8% rise.

Disney+ experienced a two per cent growth in its domestic paid subscriber base, encompassing both the U.S. and Canada, alongside a one per cent increment in international subscriptions, excluding those for Disney+ HotStar.

In the recent quarter, Disney+ saw a slight increase in paid subscribers, reaching an unexpected 126 million, a 1% rise from the 124.6 million recorded in the previous quarter, contrary to The Walt Disney Co.'s earlier projection of a modest decline.

Collectively, Disney+ and Hulu amassed 180.7 million subscribers, signifying an increase of 2.5 million compared to the initial quarter.

“A potent combination of content enabled Disney to achieve a stronger than anticipated quarter, coinciding with the sustained growth in profitability of the company’s streaming operations,” stated Mike Proulx, a Forrester vice president and research director, via email. “Disney’s contemplation of investments in localized international content may indicate a strategic move to directly challenge Netflix, a company renowned for its robust international content offerings.”

Disney has enjoyed a dual advantage from its box-office successes, as these productions furnish content for its expanding streaming platform.

According to Iger and Johnston, "Moana 2" has amassed over 139 million streaming hours since its debut on Disney+ on March 12, marking it as the most successful premiere for a Walt Disney Animation Studios film on the platform since "Encanto." The initial "Moana" film continues to be the most extensively viewed movie on Disney+, with streaming hours exceeding 1.4 billion.

The Experiences division, encompassing Disney's six global theme parks, cruise line, merchandise, and videogame licensing, announced a 9% increase in operating income, reaching $2.5 billion. Operating income saw a 13% rise within domestic parks. However, international parks and Experiences experienced a 23% decline in operating income, attributable to weaker performance at the Shanghai and Hong Kong theme parks.

While Disney keeps working hard to manage all the different parts of its business, it is also still looking for someone to take over from Iger, who has been the main person representing Disney for most of the last twenty years.

Disney established a succession planning committee in 2023, with the rigorous search commencing last year when the company appointed Morgan Stanley Executive Chairman James Gorman to spearhead the initiative.

Disney has some breathing room, as Iger agreed to a contract extension that retains him at the company until the close of 2026.

Disney is considering both internal and external candidates, with internal contenders reportedly including key figures such as Jimmy Pitaro, Chairman of ESPN, Josh D’Amaro, Chairperson of Walt Disney Parks and Resorts, and Disney Entertainment Co-Chairmen Alan Bergman and Dana Walden.

Disney expects to earn $5.75 per share for the whole year, which is more than the $5.43 per share that experts surveyed by FactSet predict. This new prediction is higher than the company's earlier forecast of earning a high single-digit percentage more per share in the fiscal year 2025.