Disney fell short of expectations for profit and key revenue segments during the fiscal fourth quarter, but saw strong streaming growth for its Disney+ platform — a rare bright spot in the report out Tuesday.
The company reported that Disney+ added 12.1 million subscriptions during the period, bringing the platform’s total subscriber base to 164.2 million, higher than the 160.45 million analysts had forecast, according to StreetAccount estimates.
CEO Bob Chapek also said that Disney+ will achieve profitability in fiscal 2024. The direct-to-consumer division lost $1.47 billion during the most recent quarter.
The company is set to hike prices for the service in December and is planning an ad-supported tier, which is expected to boost revenue.
But the better-than-expected streaming numbers come alongside top- and bottom-line results that missed Wall Street expectations. And the company’s parks and studio divisions came in short as well.
Here’s how the company performed in the period from July to September:
- Earnings per share: 30 cents per share adj. vs 55 cents expected, according to a Refinitiv survey of analysts
- Revenue: $20.15 billion vs $21.24 billion expected, according to Refinitiv
- Disney+ total subscriptions: 164.2 million vs 160.45 million expected, according to StreetAccount
At the end 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 in the streaming space, had 223 million subscribers, according to the most recent tally.
Disney reported record results at its parks, experiences and products segment, Chapek said in an earnings release. The division, which includes the company’s theme parks, resorts, cruise line and merchandise business, saw revenue increase more than 34% to $7.4 billion during the quarter.
Operating income increased more than 66% to $1.5 billion as spending increased at its domestic and international parks and consumers booked voyages on its new cruise ship the Disney Wish. However, the parks unit saw operating income come in lower than expectations, reaching $815 million compared to the $919 million expected by StreetAccount.
The company blamed cost inflation, higher operations support costs and the cost of new guest offerings for the lower figure. This was offset by higher ticket revenue that was driven by the introduction of the Genie+ and Lightning Lane options.
Its consumer products got a boost from sales of merchandise based on Mickey and friends as well as “Encanto” and “Toy Story.”
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