Disney Reports Earnings Miss for Four Consecutive Quarters... Stock Plummets 9.5%
Walt Disney's net profit for the last quarter exceeded market expectations. However, the stock price plummeted as revenue fell short of market forecasts and streaming services were expected to underperform.
Disney announced on the 7th (local time) that it recorded revenue of $22.08 billion in the first quarter (fiscal second quarter). The revenue fell short of Wall Street's forecast of $22.11 billion compiled by market research firm LSEG. Disney recorded an 'earnings miss' for four consecutive quarters.
Earnings per share were $1.21, surpassing the expected $1.10. Disney's entertainment streaming services, Disney Plus and Hulu, posted quarterly profits for the first time, causing Disney's total operating profit to surge 17%. Additionally, the combined streaming business with ESPN Plus recorded a loss of $18 million. This is a significant reduction compared to the same period last year ($659 million). Disney Plus core subscribers increased by more than 6 million, reaching 117.6 million global customers. Hulu's total subscribers rose 1% to 5.2 million, while ESPN Plus subscribers decreased 2% to 24.8 million.
The experiential segment, which includes theme parks, saw operating profit increase by 12%. Traditional television business revenue declined 8% year-over-year, and operating profit fell 22%, showing weakness.
The stock price plunged 9.5% in the New York market that day. This was due to revenue falling short of market expectations and the anticipation of weak streaming service performance in the second quarter. This marked the largest drop in 17 months since December 2022.
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CEO Bob Iger said, "Due to seasonal factors related to Indian sports content, streaming services are expected to be somewhat weak in the second quarter." However, he added, "We expect streaming to be a growth driver for the company going forward and are prioritizing the necessary actions to achieve this."
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