Disney Reports a Blowout Third Quarter

Disney has reported its third quarter financial results after the bell on Thursday and Wall Street seemed very impressed.

The company beat expectations all across the board and U.S. parks have even returned to profit.

Shares were up over 5% in after-hours trading.

For the quarter, Disney reported earnings per share of 80 cents. This is compared to 55 cents that was expected by a Refinitiv survey of analysts.

Revenue at $17.02 billion was also better than the $16.76 billion that had been expected in the same survey.

The company topped subscriber estimates for Disney+, coming in at 116 million. StreetAccount estimated the company to report only 114.5 million subscribers for its third quarter. The segment had 103.6 million in its fiscal second quarter.

Overall, the company said it had nearly 174 million subscriptions across Disney+, ESPN+ and Hulu at the end of its third quarter.
Average monthly revenue per subscriber for Disney+ fell 10% year over year to $4.16. The company attributed the drop to a higher mix of Disney+ Hotstar subscribers compared with the prior-year quarter.

The company is experimenting with viewership habits and how it releases films following COVID-19. The company will release “Shang-Chi” in theaters exclusively for 45 days before adding it to its streaming service.

“The prospect of being able to take a Marvel title to the service after going theatrical with 45 days will be yet another data point to inform our actions going forward on our titles,” CEO Bob Chapek said on the earnings call.

Revenue for direct-to-consumer segments jumped 57% to $4.3 billion. Average monthly revenue per paid subscriber grew slightly for ESPN+ and Hulu.

Disney said the company’s total addressable market is 1.1 billion households across the globe.

“We’ve only just begun our journey and as I think you see what’s really going to make the difference for Disney is our spectacular content, told by the best storytellers, against our powerhouse franchises,” Chapek added.

Disney’s parks, experiences and products segment returned to profitability for the first time since the Covid pandemic began. It should be noted however that parks alone are not yet profitable.

Revenue at Disney’s parks, experiences and products segment soared 307.6% to $4.3 billion, as all of its parks were reopened during the fiscal third quarter and attendance and consumer spending rose.

Disney’s domestic parks eased restrictions in April, which led to a boost in attendance.

“We see strong demand for our parks continuing,” Chapek said on the call.

Disclaimer: We have no position in any of the companies mentioned and have not been compensated for this article.