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Friday, August 13, 2021

Disney+ Growth Rebounds With 116M Subs


Walt Disney Co. parks saw a strong rebound in visitors as people left their pandemic cocoon, but the company acknowledged uncertainty ahead because of the coronavirus Delta variant, reports The Wall Street Journal. 

“We did not anticipate—nor did I think anybody—the resurgence of Covid with the Delta variant that would have such a significant impact on the marketplace,” Chief Executive Bob Chapek said on the quarterly call with analysts.

The company posted fiscal third-quarter sales of $17 billion, up 45% from the year-ago quarter, when the pandemic locked down much of the world, but results were still below the $20.2 billion in the 2019 third quarter. Analysts polled by FactSet expected sales of $16.76 billion.

Overall, Disney beat analysts’ estimates for its fiscal third quarter and recorded $918 million in profit, or 50 cents a share, for the three-month period ended July 3, compared with a year-ago loss of $4.72 billion, or $2.61 a share. Adjusted earnings were 80 cents a share. Disney’s stock price climbed in after-hours trading to over $188 a share, up around 5% its close of $179.29 a share before the results were released.

The company’s theme parks and consumer products division posted its first profitable quarter in more than a year. Revenue at the division—which includes its storied Walt Disney World and Disneyland resorts—increased 300% from the year-ago period, and it swung to a profit of $356 million for the quarter.

Disney executives said its parks have more reservations for the future than there was attendance in the third quarter. They didn’t discuss vaccinations or new restrictions due to the Delta variant. Last month, Disney reinstated an indoor mask mandate at its theme parks in the U.S. regardless of vaccination status.

Chapek reiterated that the direct-to-consumer streaming strategy is the company’s top priority and noted that moviegoers remained reluctant to go to theaters even as cinemas reopened.

Disney+ subscriber numbers beat estimates, reaching 116 million, up from 103.6 million in the second quarter, but its Hulu services had even higher growth rates. Total Hulu subscriptions rose 21% from a year ago, to 42.8 million. Hulu’s paid service generates more than three times the average monthly revenue per subscriber when compared to Disney+, the company said in its report.

 Chapek also underscored that Disney will be flexible and strategic about using a combination of exclusive theatrical releases, direct-to-streaming releases or a hybrid of the two for its upcoming movies. He said decisions would be made on a film-by-film basis.

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