Walt Disney Co’s streaming service, Disney+, records a comparably slower growth. Still, Disney’s net profit managed to surge nearly twice of last year’s record. Unfortunately, shares for Disney slipped following the news.
Disney recent earnings report
A total of 103.6 million customers subscribed to Disney+ as of early April, the company said. Two Marvel superhero series, “WandaVision” and “The Falcon and the Winter Soldier,” debuted during the quarter. Analysts had projected 109.3 million, according to FactSet.
The average monthly revenue per paid subscriber for Disney+ decreased from $5.63 to $3.99, the company said, due to the launch of the lower-priced Disney+ Hotstar in overseas markets. Factset estimates showed Wall Street was expecting average revenue of $4.10 per user.
Overall revenue fell 13% to $15.61 billion in the second quarter ended April 3, a touch below what analysts estimated, according Refinitiv.
Net income from continuing operations rose to $912 million in the second quarter from $468 million a year earlier.
Operating income at Disney’s media division rose 74% from a year earlier to $2.9 billion as profit rose at domestic and international TV networks. The streaming media unit lost $290 million, less than half of what Wall Street expected, thanks in part to higher advertising revenue at Hulu and ESPN+ income from Ultimate Fighting Championship pay-per-view events.
The theme parks division posted an operating loss of $406 million. The Disneylands in California and Paris were closed for the full quarter. Disneyland in California reopened April 30.
Adjusted earnings-per-share for the fiscal second quarter came in at 79 cents for January through April 3, Disney said. Analysts had expected 27 cents, according to IBES data from Refinitiv.
On Friday, Reuters reported a 3.7% loss in Disney’s shares in after-hours trading.
Future plans
Disney is focusing on quickly building its streaming service to challenge Netflix Inc as audiences move away from cable TV. The company’s popular theme parks remain in recovery mode with attendance limits due to the COVID-19 pandemic.
CEO Robert Chapek said that movie and television shows were resuming normal production and new offerings would help bring in new customers to Disney+, ESPN+, Hulu and Hotstar.
“(Disney+) growth is significantly decelerating as the initial pandemic boost has waned,” eMarketer analyst Eric Haggstrom said. “Given Disney’s content investments, subscriber growth should return strongly once this short-term turbulence ends.”
Chapek said Disney will continue to experiment with movie distribution while theaters try to lure audiences back. The company will offer late summer releases “Free Guy” and “Shang-Chi and the Legend of the 10 Rings” exclusively in theaters for 45 days, a shortened period that has been embraced by other studios to allow for home viewing sooner.
Read also: Disney+ Paid Subscribers Surpass 100 Million
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