Walt Disney swung to a surprise quarterly profit, as "The Mandalorian" and "Soul" lifted its fast-growing streaming business, outweighing pandemic worries about its hobbled theme park operations.
Investors overlooked a 53% decline in park revenue in the quarter and welcomed Disney+ streaming reaching 94.9 million subscribers.
The "Star Wars"-inspired "Mandalorian" series and Pixar's animated "Soul" movie helped position the year-old Disney+ as a credible threat to the dominance of Netflix in the streaming video wars. Including Hulu and ESPN+, Disney's paid streaming membership topped 146 million.
"Disney+ has been a massive success and is a testament to Disney's brand equity and expertise in storytelling," eMarketer analyst Eric Haggstrom said.
"This has been one of the most successful consumer product launches in recent memory."
The company posted earnings of 32 cents per share for October through December. Wall Street had expected a loss of 41 cents per share, according to the average forecast of analysts surveyed by Refinitiv.
Quarterly revenue fell to $16.25 billion from $20.88 billion a year earlier, but was still above analysts' average estimate of about $15.93 billion.
During the pandemic "we have made significant changes while finding new and innovative ways to conduct our businesses," Disney chief executive Bob Chapek said on a conference call with analysts.
"But at the same time, we have chartered a course for an even more deliberate and aggressive (streaming) push."
As the coronavirus pandemic drags on, Disney's theme parks in California, Hong Kong and Paris remain closed and others have limited attendance to allow for social distancing.
The company expects Disneyland in California and Disney Paris to remain closed up to March and hopes its park in Hong Kong can reopen sometime before April, Disney's chief financial officer Christine McCarthy said.
The movie studio has delayed several major releases as many theaters remain shut.
While the company has moved some films to streaming, Chapek said Disney still plans for Marvel action movie "Black Widow" to be released in cinemas. The film, starring Scarlett Johansson, is currently scheduled to debut on May 7.
Disney's media and entertainment distribution unit, which includes streaming, the movie studio and traditional TV networks, reported operating income of $1.5 billion, a 2% decline from a year earlier.
At the parks and consumer products division, operating loss from the parks and consumer products business hit $119m, compared with a profit of $2.52 billion a year earlier.
The closures and reduced operations cost about $2.6 billion, Disney estimated.
Looking ahead, the company said it expected costs to comply with government regulations and to implement safety measures at parks and in TV and film production to reach $1 billion in fiscal 2021.
The direct-to-consumer segment, which houses Disney+, reported an operating loss of $466m, compared with an operating loss of $1.11 billion the same time a year earlier.