Disney Misses Q1 But Points To Streaming Growth and Park Rebound

Trade DIS Stock Your Capital Is At Risk
Ollie Martin
Updated: 12 May 2022

Key points:

  • Disney misses on top and bottom lines, but points to strength in streaming
  • Theme park revenue has also seen a huge bounce back, more than doubling from last year
  • DIS shares are currently trading at a premarket loss of 4%

When Netflix shocked the markets with its first loss of subscribers, fears trickled into the rest of the global video streaming market surrounding concerns about total market size. Refreshingly for Disney, streaming is clearly still a very much in-demand service; proved in the company’s strong first-quarter earnings release. Disney added 7.9M new subscribers to its Disney+ platform, coming just shortly after Netflix warned of a 2M loss in subscribers.

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From strength to strength, Disney also reported a strong rebound in its theme park division, with quarterly revenue more than doubling year over year, totalling $6.6B; comfortably beating the Street consensus. Back to the company’s streaming arm, Disney+ reached an impressive 137.7M subscribers; with the total number of subscribers including ESPN Plus and Hulu, reaching 205M. 

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Company CEO Bob Chapek expressed his confidence in Disney+ meeting its subscriber target of 230M-260M by 2024, despite company CFO Christine McCarthy tempering expectations: “The first half came in better than expected, so that delta that we had initially anticipated may not be as large…But we still do expect an increase in the second half to exceed the first half.” 

Disney reported revenue of $19.2B in Q1, up 23% from last year but missing analyst expectations due to costs surrounding early termination of rights for TV shows and films. Earnings were pegged at $1.08, slightly short of the Street forecast of $1.19 due to the increase in effective tax rate on foreign earnings. 

Investors didn’t react well to the earnings release; DIS shares are currently trading at a premarket loss of 4%. Clearly an uptick in streaming popularity and a bounce back in its theme park division wasn’t enough for bulls –  an outlook of uncertainty continues to govern the markets. 

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