Nov 8, 2022 - Economy

Disney misses on revenue and earnings but tops subscriber predictions

Photo by Joe Raedle/Getty Images

Disney's stock was down more than 6% in after-hours trading after the entertainment giant said it missed Wall Street expectations on revenue and earnings for its fourth fiscal quarter, but surpassed expectations on streaming subscriber additions.

Why it matters: Investors are looking for signs that Disney's streaming division is still on a steady path to profitability. But the economy looks to be taking a toll on some of Disney's financials.

Details: On Tuesday, Disney CEO Bob Chapek said in a letter to investors that the company expects its streaming unit's operating losses "to narrow going forward and that Disney+ will still achieve profitability in fiscal 2024," assuming the economy doesn't shift meaningfully.

  • Last quarter, Disney lost $1.47 billion on its direct-to-consumer streaming division, more than double the amount it lost the same quarter the year prior.
  • Disney blamed the increased expenses on revenue losses at Disney+ and a decrease in results at Hulu. Losses, it said, were partially offset by improved results at ESPN+.
  • Disney said that the average monthly revenue per paid subscriber (ARPU) last quarter in the U.S. for Disney+, for Disney+ Hotstar in India and for Hulu's on-demand service was down compared to the same quarter the year prior.
  • Some of those losses were attributable to lower per-subscriber ad revenue. ESPN remained a bright spot, with marginal increases in ARPU.

By the numbers via CNBC:

  • 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
  • ESPN+ total subscriptions: 24.3 million
  • Total Hulu subscriptions: 47.2 million
  • Hulu SVOD only subscriptions: 42.8 million
  • Hulu Live TV + SVOD subscriptions: 4.4 million

The big picture: Streaming continues to be a core focus for Disney, but its parks and resorts division last quarter proved to be far more resilient.

  • Disney said record revenues for its parks, experiences and products segment, but it lost revenue in its media and entertainment division compared to the same quarter the year prior.
  • The company attributed those losses, in part, to fewer direct-to-consumer theatrical releases and less content licensing to third parties, because it wants to keep more shows exclusive to its own services.

Go deeper: Disney earnings from the past year:

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