Disney earnings: Stock slips as Disney+ bleeds millions of subscribers


Shares of Disney dropped in after hours trading Wednesday following the release of its quarterly financials, as the largest entertainment company in the world met revenue expectations but surprisingly shed subscribers in its key Disney+ streaming service.
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Disney CEO Bob Iger reported results from his first full quarter as the company’s reinstated boss Wednesday.

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Key Takeaways
  • Disney met Wall Street projections on the top and bottom lines, posting $21.82 in revenue and $0.93 earnings per share in the three-month period ending April, in line with consensus analyst estimates of $21.8 billion and $0.93, respectively, according to FactSet.
  • A majority of Disney’s profits came from its theme parks division, posting $2.2 billion in net income in the unit, while its content-heavy segment made $1.1 billion.
  • The firm lost 3.6 million paid subscribers to its direct-to-consumer streaming services, including a four-million subscriber drop in Disney+ users, shrinking Disney+’s total subscriber base to 157 million.
  • Analysts projected Disney to gain 4.2 million streaming subscribers overall and add 1.7 million subscribers to Disney+.
  • An 8% drop in subscribers in Disney+’s Indian segment accounted for most of the losses, though the service also lost 300,000 American users.
  • The company reported $4.44 in average revenue per Disney+ subscriber, meeting projections, and posted a 1% jump in subscribers to the service exclusive of India.

Despite the eye-popping exodus at Disney+, Disney’s earnings report included a key silver lining in narrowing streaming losses. Its $659 million loss in its direct-to-consumer content unit was the slimmest in six quarters, down 26% from the last three months of 2022.

Key Background

Disney’s stock has far underperformed the broader market in recent years, shedding about 25% since February 2020 compared to a 40% rally for the S&P 500, though it remains the biggest media and entertainment-first company in the world by market capitalization. The California-based company is in a particularly rocky three-year stretch, headlined by the near-total shutdown of its parks in the early portion of the Covid-19 pandemic and the exit (and eventual return) of its long-time CEO Bob Iger.

During the three-year tenure of Iger’s replacement Bob Chapek, Disney posted its smallest annual profits in over a decade thanks largely to mounting losses in streaming, which has lost at least $290 million in each quarter since the company first reported unit-specific financials in December 2020.

Despite being largely heralded by Wall Street due to the executive’s commitment to cleaning up the company’s books, Iger’s November comeback has yet to fully inspire investors; Disney shares’ 10% gain over the period is in line with the Nasdaq’s 9% rally. Shares of Disney spiked as much as 9% following its February earnings report after Iger announced the re-institution of dividend payments to shareholders for the first time since 2020.

Crucial Quote

“The market is ignoring the increasing importance of Disney’s [Parks, Experiences and Products] segment to the overall financial health of the company,” MoffettNathanson analysts including Michael Nathanson wrote last month. The parks and products divisions are the “crown jewels that are a true differentiator and driver” of sales and profit growth for Disney.


Disney is contending with a messy political battle in Florida, filing a lawsuit against Gov. Ron DeSantis (R-Fla.) for his attempt to revoke the company’s special political status for its Disney World theme park outside of Orlando, a move that came after Disney criticized DeSantis’ legislative agenda. In a recent note to clients, Daiwa analyst Jonathan Kees upgraded Disney rival Comcast’s price target by about 5%, citing Comcast’s lack of distraction by Florida “political risks like its much larger parks, studios, and broadcast/linear networks peer.”

This story was first published on forbes.com and all figures are in USD.

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