Disney shares drop as Q4 falls short and rival Netflix steps up
Disney's fiscal fourth quarter earnings and revenue numbers fell short, and there was a drop in average revenue per user. Added to this, Netflix is expanding its offering to live sports which piles the pressure on Disney’s board.
(Video Transcript)
Q4 earnings bite
The stock of Walt Disney fell in excess of 6% all sessions on the IG platform late last night as a result of fiscal fourth quarter (Q4) earnings that were released after the bell.
It fell short of expectations for profit and key revenue segments during the fiscal fourth quarter, but saw strong streaming growth for its Disney Plus platform.
We saw earnings per share (EPS) come in at $0.30, estimates have been for 59. Revenues of $20.15 billion, also fighting shy of the estimates of more than $21.3 billion.
The chief executive of Disney, Bob Chapek, said in the earnings release that Disney Plus will achieve profitability in fiscal 2024. The Direct to Consumer Division lost $1.47 billion during the most recent quarter. It also reported a 10% drop in domestic average revenue per user to 6.1%.
Disney share price
Let's take a look at Disney share prices because this is all sessions and we've just got the open today.
Further down, we're down half of 1%. This is how the stock moved in yesterday's trade all the way on the way down. And in fact, at one point yesterday ending down at the worst point, down at levels not seen since pretty much the Covid lows. back in March 2020, there was a recovery towards the end.
But as I say, we're now building on the downside again all sessions on the IG platform indicating potentially a weaker start to the trading day ahead when things get underway.
Netflix
Also in a follow up on Netflix , which is a rival to Disney Plus on the streaming business, according to The Wall Street Journal, Netflix is exploring investments in live sports broadcasting and its recently bid for the streaming rights for sports leagues.
It's the first time it's gone into this area of broadcasting, live broadcasting. It'll be interesting to see whether or not it gets any traction on this. And if it does, it could well give it an extra leg beyond that offered by Disney Plus, we'll have to see how things develop.
Netflix all sessions on the IG platform currently down half of 1% after yesterday's gains that we saw. The big move up that we've seen recently is the fact that Netflix now undercuts Disney at the discount end of the streaming market.
This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
Seize a share opportunity today
Go long or short on thousands of international stocks.
- Increase your market exposure with leverage
- Get spreads from just 0.1% on major global shares
- Trade CFDs straight into order books with direct market access
Live prices on most popular markets
- Forex
- Shares
- Indices
