Disney shares: earnings beat but streaming subscribers down again
Disney posted mixed results for the fiscal third quarter on Wednesday evening after the close on Wall St amid ongoing streaming woes and massive restructuring costs from pulling content from its platforms.
While adjusted earnings per share (EPS) came in at $1.03 against forecasts of 95 cents, revenue was short at $22.3 billion, forecasts were for $22.5bln according to Refinitiv.
Disney+ streaming subscriptions fell 7.4% to 146.1 million, versus 151.1 million expected. The majority of subscriber losses came from Disney+ Hotstar, where the company saw a 24% drop in users after it lost out on the rights to Indian Premier League cricket.
(Video Transcript)
Disney earnings
Walt Disney had a bit of a mixed bag when it comes to their latest financial results. While they managed to exceed expectations in terms of earnings, their revenue fell a bit short. One of the main issues they faced was a decrease in their streaming subscribers, mostly due to losing rights to the Indian Premier League cricket.
However, there were some positive developments as well. One exciting piece of news for Disney was their partnership with Penn Entertainment to launch ESPN Bet, a sportsbook. This deal is expected to bring in a hefty $2 billion. Additionally, Disney announced their plans to start paying dividends again by the end of 2023.
Share price surge
These announcements caused the stock price to surge, reaching levels not seen in months. However, the stock price also experienced some ups and downs throughout the day. Initially, it rose when news broke about Disney beating earnings expectations. But then it dropped, as concerns about their streaming services came to light. Ultimately, the stock ended up one percent after the closing bell.
Despite the challenges, Disney's adjusted earnings per share surpassed expectations, which is definitely a positive sign. On the other hand, the decline in streaming subscribers, particularly from their Disney+ Hotstar platform, is a significant obstacle that the company needs to overcome.
Investors did find some hope in the ESPN Bet deal and the plan to resume paying dividends. These developments provided them with a glimmer of optimism for the future. So, while there were some mixed results, Disney still has potential for growth and success in the long run.
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