Media and entertainment conglomerate Disney (DIS) smashed estimates for the first fiscal quarter on Thursday night, with a surprising profit from the increase in the number of streaming subscribers. Disney shares have increased.
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Disney earnings report
Estimates: Analysts expect Disney to record a loss of 45 cents per share against EPS of $ 1.53 a year ago, as revenue fell 24% to $ 15.8 billion, according to Zacks Investment Research.
Results: EPS of 32 cents on revenue of $ 16.25 billion. Disney + subscribers rose to 94.9 million as of December 2. They will see a higher revenue increase in March, when tuition increases from $ 1 to $ 7.99 in the US and from 2 euros to 8.99 euros a month in Europe.
Although theme parks and theaters remain closed and cruise ships are moored, continued growth is increasing. Disney + accounted for 6% of average consumer time spent on weekly streaming in December 2020, while rival Netflix (NFLX) decreased slightly to 28% from 31% in December 2019, wrote JPMorgan analyst Alexia Quadrani in a note to customers.
Pixar’s “Soul” finished first during Christmas week, according to Nielsen’s rating. Programs like “WandaVision” and “The Mandalorian” have been big hits for Disney +. “The Mandalorian” has made headlines in recent days for another reason as well. Lucasfilm, which produces the Star Wars series, announced yesterday that he had fired star Gina Carano, who played the former rebel soldier Cara Dune, for controversial political comments on social media.
Disney Stock
The shares rose 2% at the end, after closing with an increase of 0.7% in 190.91 on the stock exchange today. Disney shares rose beyond a buying point of 183.60 and are still within the buy range on a flat basis, according to analysis by the MarketSmith chart.
Its relative strength line, which compares a stock’s performance to that of the S&P 500, is growing. Disney shares have an RS rating of 73 out of 99 possible.
Among streaming rivals, Netflix fell 1% on Thursday, Apple (AAPL) lost 0.2%, and Amazon (AMZN) fell 0.7%.
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Will California’s parks reopen soon?
Disney shares rose earlier this week when Disney President Ken Potrock told employees that a ticket food event was being planned for California Adventure in mid-March. Company officials said the event would take place several days a week with reduced capacity.
The event would bring about 1,000 workers back to the park and raise hopes for a wider opening, which would help ease a major hurdle in Disney’s financial results and actions.
Disneyland is also considering annual “parts of the day” passes when the park reopens, according to media reports. This means that pass holders can visit the park at certain parts of the day at a reduced price. This would allow park officials to control the crowds during reopening during a pandemic.
Meanwhile, California lawmakers last week introduced a bill that would allow Disneyland to reopen earlier than planned. The bill wants to place theme parks on Level 3 Orange (moderate) under the state’s Covid-19 orientation for the reopening of theme and amusement parks. Currently, thematic parts cannot be reopened until the county in which they reside reaches Level 4 Yellow (minimum).
In December, the guidance was changed to allow the reopening of small parks at Level 3. The project asks the authorities to treat both large and small parks equally.
If the project is approved, Disneyland will only be able to operate at 25% capacity. Disneyland has been closed since March 2020. It is not expected to reopen before spring or summer.
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Disney + invested ahead
During the pandemic, the streaming service has been a bright spot for Disney’s actions, and big plans are ahead.
At an Investor Day event on December 11, management said there are more than 100 titles underway for Disney +. And CEO Bob Chapek said the company expects to have 230 million to 260 million Disney + subscribers by 2024. This is above its previous estimate of 60 million to 90 million for the same period.
Meanwhile, customers in the United States who signed up for Disney + through promotional deals are continuing. Verizon (VZ) stated that more than two-thirds of customers who launched the initial Disney + promotion chose to keep their subscription through Verizon or opted for a combined plan that included the Disney package for free, Quadrani said.
Follow Adelia Cellini Linecker on Twitter @IBD_Adelia.
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