Walt Disney Co., Disney + streaming service was once again a major contributor in a pandemic that has virtually shut down other Magic Kingdom businesses. And that had Disney shares up 2% in after-hours trading Thursday.
An increase in Disney + membership, to 94.9 million, led to revenue from the previous quarter as the media giant continues to double direct-to-consumer sales.
Disney DIS,
fiscal surprises in the first quarter of $ 17 million, or 2 cents a share, reported sales of $ 16.25 billion, up from $ 15.8 billion in the fourth year ago.
After adjusting for restructuring costs and other impacts, Disney reported earnings of 32 cents a share, down from a $ 1.53 share in the fourth year ago. Analysts on average expected Disney to report an adjusted loss of 34 cents a share on sales of $ 15.9 billion, according to FactSet.
“We believe that the strategic actions we are taking to transform our company will drive our growth and increase shareholder value, as evidenced by the remarkable steps taken. we performed in our DTC business, reaching over 146 million paid memberships across our streaming services. at the end of the season, ”Disney CEO Bob Chapek said in a statement announcing the results.
“Disney + has exceeded our highest expectations,” Chapek said in a conference call with analysts later, noting that it stood at 26.5 million people- recorded in the same quarter a year ago. He also noted spikes in usage for ESPN + (up 83% to 12.1 million) and Hulu (up 30% to 35.4 million).
Disney Media and Entertainment Distribution, which includes Disney +, totaled $ 12.66 billion for the quarter, a 5% decline from the same quarter a year ago before the pandemic spread across Parks, Experiences and U.S. Disney results at $ 3.6 billion, down 53% year-over-year as some Disney parks remain closed.
The steady strength of Disney + has impressed Wall Street analysts despite strong competition from Apple Inc.’s AAPL,
Apple TV +, Netflix Inc. NFLX,
T AT&T Inc.,
HBO Max, CMCSA at Comcast Corp.
Peacock, AmazonZ Inc.’s AMZN,
Prime Video, and others.
“Disney + has been a huge success and a testament to Disney’s equality and brand experience in storytelling,” said eMarketer forecast analyst Eric Haggstrom. “This is one of the most successful product launches recently. Moving forward, Disney will continue to grow its streaming industry, and its parks, television and film industries will benefit and recover quickly as a result of increased vaccination and high demand for construction. ”
With Disney investing heavily in its streaming business – which plans to plow $ 14 billion to $ 16 billion across all of its services by 2024 – it is unlikely to be profitable in the long run. at least 2023. Disney + is expected to generate more revenue in March, when the monthly fee rises by $ 1 to $ 7.99 in the U.S. and by 2 euros to 8.99 euros per month in Europe.
The growth of subscribers at Disney +, ESPN +, Hulu, and Hotstar remains the focus instead – and for good reason. During their Dec. 10 investment day, Disney management indicated that these services could reach approximately 350 million subscribers by 2024.
Disney stock has grown more than 35% in the past year, up 24% from its December investment day. Dow Jones industrial average DJIA,
– which counts Disney as part – has advanced 7% over the past year.