Disney Roars Back...Beats Earnings Expectations

from Disney’s animated film ‘Encanto’

The Walt Disney Co. regained momentum in subscription growth for its flagship Disney+ streaming service and reported record income from its theme parks and resorts, signaling that the worst of the damage the company suffered from the coronavirus pandemic may be behind it, reports The Wall Street Journal.

Disney reported 11.8 million new Disney+ subscribers to reach 129.8 million subscribers at the end of the holiday quarter, up from 118.1 million subscribers in the prior quarter, beating analysts’ expectations the service would add fewer than seven million additional subscribers, according to FactSet.

WSJ Graphic

Disney posted $21.82 billion in revenue for the quarter, compared with $16.25 billion a year earlier. Analysts were expecting the company to report revenue of $20.27 billion.

“We are more confident than ever in this platform,” Chief Executive Bob Chapek said of Disney+ in an earnings call with investors.

The results at the world’s largest entertainment company underscore how U.S. consumers are returning in droves to live entertainment venues like theme parks but haven’t completely abandoned the media consumption habits they developed during the pandemic.

Chapek said the recent turnaround in subscription growth is the result of Disney’s focus on creating new content for its most popular franchises, including Star Wars and Marvel, as well as the decision to bundle Disney+ subscriptions with its Hulu and ESPN+ services, which show more general interest TV series and live sports.

He said the company is still on track to reach 230 million to 260 million Disney+ subscribers by the end of fiscal 2024.

Disney executives said the company expects continued growth for Disney+ in the U.S. and internationally and pointed to plans to spend $33 billion on new content this fiscal year as a key driver for new subscriptions. The company broke the investment down into about $22 billion on entertainment and $11 billion on sports and sports rights.

The company added 41 million new international subscribers, excluding Disney+ Hotstar, an increase of 40% from the same period a year earlier.

You will find more infographics at Statista

Parks business roars back

CNBC reports Disney’s parks, experiences and consumer products division saw revenues reach $7.2 billion during the quarter, double the $3.6 billion it generated in the prior-year quarter. The segment saw operating results jump to $2.5 billion compared to a loss of $100 million in the same period last year.

Disney said the growth in revenue came as more guests attended its theme parks, stayed in its branded hotels and booked cruises.

McCarthy noted that Disney’s domestic parks, particularly its Florida-based locations, have yet to see a significant return in ticket sales from international travelers, which pre-pandemic accounted for 18% to 20% of guests.