Disney Shares Fall as CEO Gives Dismal Warning About Q4

Shares of Disney took a tumble on Tuesday after the company’s CEO Bob Chapek had warned that fourth quarter subscriber growth is lower than estimates.

Deutsche Bank analyst Bryan Kraft had projected Disney+ net adds of about 13 million in the quarter. Disney has projected 230 million to 260 million Disney+ subscribers by 2024. Disney said in August it had 116 million Disney+ subscribers.

Chapek has warned of headwinds on subscription video streaming growth for the fourth quarter and noted that production slowdowns caused by the COVID-19 delta variant will lead to a lighter slate of new programming than the company had originally expected.

The CEO had also said that “mobilizing partners” in Latin America to push Disney’s new Star+ streaming service, the Covid-related suspension of the India Premier League — whose games air on Disney’s Hotstar, and production delays from the delta variant have all hurt subscriber numbers in the fourth quarter.

The comments, made at the Goldman Sachs Communacopia Conference resulted in shares tumbling over 3%.

Disney is expecting to add “low single-digit millions” of streaming subscribers in the fourth quarter, Chapek said.

“We are going to see a little bit more noise than maybe the Street projects quarter to quarter,” Chapek said. “The resurgence of Covid and delta did impact some of our productions.”

Chapek remains confident in Disney’s long-term growth outlook.

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