Walt Disney Co. reported subscriber gains for its flagship streaming service that exceeded analysts’ estimates, allaying fears that its online TV business may be peaking after Netflix Inc. posted a surprise decline last month.

Disney finished its fiscal second quarter with 137.7 million Disney+ subscribers globally, an increase of 33% from a year ago, the company said Wednesday. Although the quarterly gain was smaller than the growth that the service saw in the company’s fiscal first quarter, the total beat Wall Street estimates of 134.4 million.

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Investors were expecting slower growth after Netflix shocked Wall Street by reporting a surprise drop in subscribers and forecasting an even steeper loss in the current quarter. That led the company, the streaming industry leader, to tear up its playbook and announce plans for a lower-priced version of the service that includes advertising.

Disney’s other streaming services, Hulu and ESPN+, posted total subscribers of 45.6 million and 22.3 million respectively.

Disney’s earnings rose to $1.08 a share but missed the $1.17 average estimate of analysts due in part to sharply higher taxes paid in international markets. Sales in the period ended April 2 jumped to $19.2 billion, but trailed the $20.1 billion forecast on Wall Street after the company lost $1 billion in licensing revenue as it focuses on its own streaming business.

Shares of Disney rose as much as 6.8% to $112.33 in extended trading after the results were announced. The stock was down 32% this year, making it one of the biggest losers in the Dow Jones industrial average.

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Theme parks were strong as expected. Earnings at the company’s resort division were $1.76 billion, recovering from a loss a year earlier, as guests returned in force to its hotels and theme parks. Among the new attractions opening in the quarter was the Star Wars Galactic Starcruiser, an all-inclusive hotel with Star Wars characters that costs $4,800 for a two-night stay for two guests.

In February, CEO Bob Chapek again warned of a challenging first half but predicted streaming subscriber growth would accelerate in the second half of the year, when new film and TV projects are ready and new markets are added. Streaming video is a key growth area for Disney, which like other media companies is seeing a dwindling audience for traditional TV.

Profit in the company's traditional TV division fell 1% to $2.82 billion as higher sports programming costs offset advertising gains. 

The loss at the company’s direct-to-consumer unit more than doubled to $887 million, due to higher investments in film and TV content, partly offset by higher advertising and subscriber revenue.

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—Bloomberg News