Walt Disney (DIS) posted weaker-than-expected fourth quarter earnings Wednesday, but topped Street forecasts for new streaming subscribers and once again overtook Netflix (NFLX) as the world's biggest platform.
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.
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). 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.
“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,” said CEO Bob Chapek. “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 $93.08 each.
Parks and Experiences revenues came in at $7.4 billion, topping the Street's estimate and rising more than 35% from last year as visitors returned to re-open resorts and cruises around the world, particularly in Hong Kong and the United States.
