Disney Stock Drops Under $100 Ahead of Q4 Earnings Miss

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Disney stock has dipped under $100 yet again, thanks to the company announcing it missed earnings goals in Q4. DIS stock is now hovering around where it was during the pandemic, as of the time of publication.

This is a far cry from the record highs the company reported in March of 2021 as the company rode the wave of excitement over Disney Plus.

From The Street

Disney said adjusted diluted earnings for the three months ending in September, the group’s fiscal fourth quarter, came in at 30 cents per share, down 19% from the same period last year and firmly south of the Street forecast of 55 cents per share.

Group revenues, Disney said, rose 9% to $20.15 billion, again missing Street forecasts of $21.25 billion, while overall subscriber totals for its Disney+ hit 162.2 million, topping analysts’ estimates by around 1.2 million.

Despite the earnings miss, Disney added more subscribers to its streaming service. And during the Q4 earnings call, Disney CEO Bob Chapek kept reiterating that the company is producing “must-see” content and that several blockbusters are in the pipeline, like Black Panther: Wakanda Forever and Avatar: The Way of Water.

Disney added 14.6 million subscribers over the whole of the quarter, with ESPN+ totaling 24.3 million paid subscribers and Hulu rising to 47.2 million. Disney’s total subs of 235.7 million are now firmly ahead of the 223.1 million last tallied by Netflix  (NFLX) – Get Free Report. Revenue per user, however, was pegged at $3.91, falling shy of analysts’ estimates of around $4.24, suggesting subscriber acquisition costs continue to rise. The direct-to-consumer business division, in fact, posted a loss of $1.5 billion for the quarter.

Disney CEO Bob Chapek stated “2022 was a strong year for Disney, with some of our best storytelling yet, record results at our Parks, Experiences and Products segment, and outstanding subscriber growth at our direct-to-consumer services, which added nearly 57 million subscriptions this year for a total of more than 235 million.”

Chapek continued “The rapid growth of Disney+ in just three years since launch is a direct result of our strategic decision to invest heavily in creating incredible content and rolling out the service internationally, and we expect our DTC operating losses to narrow going forward and that Disney+ will still achieve profitability in fiscal 2024, assuming we do not see a meaningful shift in the economic climate.”

“By realigning our costs and realizing the benefits of price increases and our Disney+ ad-supported tier coming December 8, we believe we will be on the path to achieve a profitable streaming business that will drive continued growth and generate shareholder value long into the future,” he added. “And as we embark on Disney’s second century in 2023, I am filled with optimism that this iconic company’s best days still lie ahead.”
Disney shares were marked 6.85% lower in after-hours trading immediately following the earnings release to indicate a Wednesday opening bell price of $93.06 each,” he concluded.

[Source: The Street]


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