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• Disney+ subscriptions rose to 137.7 million during Q2, higher than the 135 million consensus
• Disney parks saw revenues more than double to $6.7 billion
Walt Disney Co (NYSE: DIS) on Wednesday reported subscriber gains for its streaming service exceeding analysts’ estimates, easing fears that its subscriber growth may be peaking after Netflix Inc (NASDAQ: NFLX) posted a surprise decline last month.
Disney+ picked up 7.9 million new customers from January through March, while Wall Street had been expecting 5.3 million new customers.
The entertainment giant also reported stronger-than-expected growth in streaming subscribers across all of its media platforms.
However, on a call with analysts, the company executives said it is working to offset inflationary pressures.
“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,” Christine McCarthy, the chief financial officer at Walt Disney said.
Shares fell more than 4% in after-hours trading on Wednesday.
Disney has slumped 30% since January, and more than 40% year-to-date as investors wonder if the company can sustain its streaming growth.
The company needs to add around 9.1 million new customers on an average per quarter to hit the low end of its goal of adding 230 million to 260 million Disney+ subscribers by the end of September 2024.
Total subscriptions for Disney+, the streaming platform that launched in November 2019, reached 137.7 million, higher than the Wall Street expectation of 135 million.
The media giant reported adjusted earnings per share of $1.08, below the market expectation of $1.19, impacted by an increase in the effective tax rate on foreign gains. It generated a revenue of $19.2 billion, below the $20.03 billion consensus estimate.
After extended pandemic-related closures and attendance restrictions, Disney’s theme park business continued a strong rebound.
Operating income at the parks unit totaled $3.7 billion, a 50% jump from a year earlier.
However, closures at Asia theme parks due to COVID-19 could lower the operating income by up to $350 million in the third quarter.
Picture Credit: Reuters
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