Saturday, 12 February 2022 06:16

Disney stock up 8% on news of earnings surpassing expectations

ORLANDO, Florida: Walt Disney has reported that its fiscal first quarter earnings surpassed analyst predictions for earnings per share and revenue.

After release of the earnings, Disney stock rose about 8 percent in extended trading.

Even as executives previously said they expect subscriber growth for Disney+ to be stronger in the second half of the year compared to the first, subscriptions surpassed estimates.

Subscribers added in the first quarter totaled 12 million, and the service also saw its average revenue per user (ARPU) in the U.S. and Canada grow to $6.68 per month, compared to $5.80 last year.

On the company’s earnings call, CFO Christine McCarthy said that Disney expects to spend significantly on streaming in the second quarter, and expects programing and production expenses for the direct to consumer business to increase by about $800 million to $1 billion.

Also, in an interview with CNBC’s Julia Boorstin, CEO Bob Chapek said Disney is bidding for NFL Sunday Ticket.

Though Netflix shares fell during its most recent report, showing slowing subscriber growth, Chapek expects the number of Disney+ subscribers to grow from 230 million to 260 million by 2024.

During the quarter, Disney’s parks, experiences and consumer products division saw revenues reach $7.2 billion, double the $3.6 billion it generated in the prior-year quarter. The segment also saw operating results rise 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.

Disney’s domestic parks have yet to witness a significant return in ticket sales from international travelers, which accounted for 18 to 20 percent of guests pre-pandemic.

After the closure of a substantial portion of its Disney-branded retail stores during the second half of 2021, the company’s consumer products business saw revenues drop 8.5 percent to $1.5 billion.