Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Disney's streaming growth counters Netflix dip, yet inflation looms

Stock Markets May 11, 2022 08:39PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. FILE PHOTO: Toy figures of people are seen in front of the displayed Disney + logo, in this illustration taken January 20, 2022. REUTERS/Dado Ruvic/Illustration

By Lisa Richwine and Eva Mathews

(Reuters) -Walt Disney Co eased concerns on Wednesday about the future of streaming video by picking up 7.9 million new Disney+ customers, although the company warned supply chain disruptions and rising wages could pressure finances.

Wall Street had been expecting 5.3 million new Disney+ customers from January through March. Disney still has a long way to go to hit ambitious, multi-year targets, but its growth encouraged investors after Netflix Inc (NASDAQ:NFLX)'s losses.

The entertainment giant is working to offset inflationary pressures and challenges in the global supply chain, executives said on a call with analysts.

"Right now, it's very difficult to accurately forecast the potential financial impact due to the fluidity of the situation but you can trust that we are fully aware of it and we're working hard to mitigate any pressure on the margin," said Chief Financial Officer Christine McCarthy.

The company's shares, which initially jumped after the earnings report, were down 3% in after-hours trading following the call.

Disney needs to average nearly 9.1 million new customers per quarter to reach the low end of its goal of adding 230 million to 260 million Disney+ subscribers by the end of September 2024. Chief Executive Bob Chapek reiterated that target on Wednesday.

The world's largest entertainment company has staked its future on building a streaming TV business to rival Netflix, the company that first drew mass audiences to subscription video.

Netflix unnerved Wall Street last month when the company disclosed it lost subscribers in the first three months of 2022 and forecast more defections through June.

The Netflix results hit media stocks and prompted investors to re-evaluate their expectations for online video.

Total subscriptions for Disney+, launched in November 2019, reached 137.7 million, the company said Wednesday, with help from new releases including Marvel's "Moon Knight" series and Pixar movie "Turning Red."

“In spite of less-than-optimal results overall, because of the positive streaming numbers, Disney will do well," said Shahid Khan, partner at Arthur D. Little, a technology and management consulting firm. "As households rationalize their streaming choices, given the inflation, Disney+ will become one of the top choices and will become a real threat to Netflix.”

Disney reported adjusted earnings per share of $1.08, below analyst forecasts of $1.19, according to IBES data from Refinitiv, impacted by an increase in the effective tax rate on foreign earnings.

Revenue came in at $19.2 billion, below the $20.03 billion consensus estimate. The company said revenue took a $1 billion hit from early termination of a film and TV licensing agreement so that Disney could use the programming on its own streaming services.

Disney's theme park business continued a strong rebound after extended pandemic-related closures and attendance restrictions.

Operating income at the parks unit totaled $3.7 billion, a 50% increase from a year earlier.

However, closures of theme parks in Asia due to COVID-19 could reduce operating income by up to $350 million in the fiscal third quarter, the company said.

Disney's streaming growth counters Netflix dip, yet inflation looms
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (2)
Mark Manley
Mark Manley May 11, 2022 4:48PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Doesn't account for all of the subscribers who canceled their plan in the last month or so due to outrage over Disney's betrayals of parents and children with their perverse ultraliberal social engineering efforts
Mad Money
Mad Money May 11, 2022 4:48PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Soft
Steve Bojo
Steve Bojo May 11, 2022 4:17PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Gee. I wonder why?
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email