Bob Chapek, Disney CEO on the Boston College Chief Executives Club, November 15, 2021.
Charles Krupa | AP
Disney fell in need of expectations for profit and key revenue segments in the course of the fiscal fourth quarter Tuesday and warned strong streaming growth for its Disney+ platform may taper going forward.
Shares of the corporate fell 10% in after-hours trading.
The corporate’s quarterly results missed Wall Street expectations on the highest and bottom lines, as each its parks and media divisions underperformed estimates. And Chief Financial Officer Christine McCarthy tempered investor expectations for the brand new fiscal yr, forecasting annual revenue growth of lower than 10%. The corporate reported fiscal 2022 revenue growth of twenty-two%.
Revenue in Disney’s media and entertainment division fell 3% yr over yr to $12.7 billion in the course of the fiscal fourth quarter, as the corporate’s direct-to-consumer and theatrical businesses struggled. Analysts had expected segment revenue of $13.9 billion, based on StreetAccount estimates.
The corporate also posted lower content sales since it had fewer theatrical movies on the calendar and subsequently, fewer movies to position into the house entertainment market.
Here’s how the corporate performed within the period from July to September:Â
- Earnings per share: 30 cents per share adj. vs 55 cents expected, based on a Refinitiv survey of analysts
- Revenue: $20.15 billion vs $21.24 billion expected, based on Refinitiv
- Disney+ total subscriptions: 164.2 million vs 160.45 million expected, based on StreetAccount
Disney+ added 12.1 million subscriptions in the course of the period, bringing the platform’s total subscriber base to 164.2 million, higher than the 160.45 million analysts had forecast, based on StreetAccount estimates.
Nonetheless, growth is predicted to slow within the fiscal first quarter, Disney executives warned on Tuesday’s conference call.
At the tip of the fiscal fourth quarter, Hulu had 47.2 million subscribers and ESPN+ had 24.3 million. Combined, Hulu, ESPN+ and Disney+ have over 235 million streaming subscribers. Netflix, long the leader within the streaming space, had 223 million subscribers, based on essentially the most recent tally.
Disney CEO Bob Chapek also said within the earnings release that Disney+ will achieve profitability in fiscal 2024. The direct-to-consumer division lost $1.47 billion in the course of the most up-to-date quarter. It also reported a ten% drop in domestic average revenue per user (ARPU) to $6.10.
The corporate is ready to hike prices for the service in December and is planning an ad-supported tier, which is predicted to spice up revenue.
Chapek has been on a mission to higher link the corporate’s divisions as one single organization and speed up its direct-to-consumer strategy.
The corporate reported record leads to its parks, experiences and products segment, Chapek said. The division, which incorporates the corporate’s theme parks, resorts, cruise line and merchandise business, saw revenue increase greater than 34% to $7.4 billion in the course of the quarter.
Still, Wall Street had barely higher hopes for the division: Analysts were expecting parks revenue of $7.5 billion, based on StreetAccount.
Operating income for the division rose greater than 66% to $1.5 billion as spending increased at its domestic and international parks and consumers booked voyages on its latest cruise ship, the Disney Wish. The parks unit, specifically, brought in $815 million in operating income, well shy of the $919 million expected by StreetAccount.
Disney blamed higher costs and said they were only partially offset by higher ticket revenue, driven by the introduction of the Genie+ and Lightning Lane guest offerings. CFO McCarthy said Tuesday Disney is on the lookout for “meaningful efficiencies” and actively examining the corporate’s cost base.
— CNBC’s Alex Sherman contributed to this report.
It is a breaking news story. Check back for updates.
