Wednesday, December 7

Disney stock soars after record revenue, $1 billion-plus in earnings and a streaming success


The Walt Disney Co. blew away expectations for the holiday season, producing a record revenue total and more than $1 billion in profit by adding more subscribers to Disney+ and other streaming services than expected amid a rebound for theme parks.

Disney 
DIS,
+3.33%
reported fiscal first-quarter net income of $1.1 billion, or 60 cents a share on sales of $21.82 billion, up from $16.25 billion a year ago. After adjusting for restructuring costs, amortization and other effects, the company reported earnings of $1.06 a share, compared with adjusted earnings of 32 cents a share a year ago. Analysts surveyed by FactSet had expected adjusted net income of 74 cents a share on revenue of $20.27 billion.

In its streaming efforts, Disney reported 129.8 million Disney+ subscribers, adding 11.8 million from the previous quarter, and 196.4 million total streaming subscribers to services that also include ESPN+ and Hulu. Analysts on average expected 124.7 million Disney+ subscribers and 191.1 million total streaming customers, according to FactSet.

Shares fell rose nearly 9% in after-hours trading Wednesday following the release of the results, after rising 3.4% to $147.31 in the regular session.

“This marks the final year of The Walt Disney Company’s first century, and performance like this coupled with our unmatched collection of assets and platforms, creative capabilities, and unique place in the culture give me great confidence we will continue to define entertainment for the next 100 years,” Disney Chief Executive Bob Chapek said in a statement announcing the results.

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The results offered the latest chapter in a COVID-era narrative for Disney, which traversed the first year of the pandemic with its theme parks shut down and live-action movies on hiatus by focusing on streaming efforts. Disney benefited from a spike in viewership of its then-new Disney+ streaming service until growth inevitably slowed, but is hoping the other businesses will bounce back as streaming growth suffers. With the Omicron variant on the wane, attendance at amusement parks and movie theaters are expected to rebound this year while Disney+ expands to 50 more countries with a full slate of content from its Marvel and Star Wars franchises.

Disney breaks down its operations into two segments, “Media and Entertainment Distribution” that focuses on content, and “Parks, Experiences and Products.” In the first quarter, the media business collected revenue of $14.59 billion in total, while analysts on average expected $14.55 billion.

The direct-to-consumer segment, which also includes international products, hauled in $4.7 billion in revenue, while analysts forecast $4.8 billion on average. The company’s television networks generated sales of $7.71 billion, while analysts’ average estimate was $7.7 billion. Content sales and licensing led to revenue of $2.43 billion vs. expectations of $2.27 billion.

Disney’s theme parks and product sales segment reported $7.23 billion in revenue as attractions continued to reopen in the U.S. and abroad, a jump from $3.59 billion a year ago. The average analyst estimate was $6.36 billion.

Disney did not provide a forecast for the fiscal second quarter in Wednesday’s results, but executives tend to provide some forward-looking color in their quarterly conference call, which is scheduled for 4:30 p.m. Eastern time.

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Disney’s results come nearly three weeks after streaming rival Netflix Inc.
NFLX,
+2.32%
executives cautioned growth would suffer much more than expected at the beginning of 2022, sending shares down 20%. Disney, which finished third among studios in Academy Award nominations (9) after Netflix (27) and Warner Bros. (16), also faces streaming competition from Apple Inc.
AAPL,
+0.83%,
AT&T Inc.
T,
+2.34%,
Amazon.com Inc.
AMZN,
-0.14%
and Comcast Corp.
CMCSA,
+1.14%.

Disney stock has struggled so far this year, falling 8% while the S&P 500 index 
SPX,
+1.45%
declined 5% and the Dow Jones Industrial Average 
DJIA,
+0.86%
— which counts Disney as a component — dipped 2%.

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