Disney+ subscriptions blow up past views but Covid still weighs in

waltz disney (DIS) missed earnings and sales estimates for its second fiscal quarter. But Disney+ subscriber growth has exceeded Wall Street expectations. Disney stock traded lower early Thursday.


Over the past two years, media and entertainment conglomerate Dow Jones Disney has pivoted to online video streaming, launching the Disney+ service, a rival to netflix (NFLX).

But despite the easing of pandemic closures and restrictions, Covid-19 continues to impact operations at international parks and resorts, cruise ships, and film and television productions “depending on local circumstances”, it said. said Disney on Wednesday night.

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Disney Earnings

Estimates: Analysts polled by FactSet had expected Disney earnings to rise 50% year over year to $1.19 a share. Revenue rebounded 28% to $20.061 billion.

They see Disney+ subscribers reach 135 million, up more than 5 million from the 129.8 million subscribers in the first quarter.

Results: Disney earnings rose 37% to $1.08 per share, without views. Revenue climbed 23% to $19.249 billion, also below.

Disney+ subscribers reached 137.7 million in the second quarter, a gain of more than 7.9 million from the first quarter. The number of subscribers on all Disney streaming channels reached 205 million.

Theme park revenue more than doubled, year-over-year, to $6.65 billion. Revenue increased by 9% in the media and entertainment segment, including 23% for streaming services. But streaming or “direct-to-consumer” losses also increased in the second quarter, with the construction of Disney+ and ESPN+ both weighing on results.

Disney said it would increase content costs by $900 million in the fiscal third quarter from a year earlier.

Disney Stock

The Dow Jones giant first jumped after the close, then reversed and remained down more than 4% in premarket trading on the stock market today. DIS stock fell 2.3% to 105.21 on Wednesday. Disney stock is heading for an eighth consecutive weekly decline, trading 48% below a March 2021 high and its lowest level since May 2020.

Disney+ vs. Netflix

The growth of Disney+, launched in November 2019, continues to hit its big rival. The number of Disney+ Q2 subscribers represents more than half of Netflix’s Q1 total of 221.6 million subscribers. NFLX surprised analysts by losing 200,000 subscribers in its latest quarter instead of adding 2.5 million subscribers as expected.

The streaming giants face multiple headwinds – competition, inflation, the Russian-Ukrainian war and subscription fatigue. Apple (AAPL), Amazon (AMZN) and Warner Bros. (WBD) offer competing streaming services.

Disney and Netflix are now planning ad-supported versions. Disney also owns Hulu and ESPN.

Disney’s extensive business portfolio includes movies, theme parks, hotels, cruise lines and consumer products.

Amusement parks rebounded in the last quarter. But as theaters have also reopened, Disney management has warned of a “long recovery” in that segment.

Find Aparna Narayanan on Twitter at @IBD_Aparna.


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