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Disney (DIS) fiscal Q2 2022 earnings

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On this photo illustration a close-up of a hand holding a TV handheld remote control seen displayed in front of the Disney+ logo.

Thiago Prudencio | SOPA Images | LightRocket | Getty Images

Disney reported higher-than-expected streaming subscriber growth on Wednesday, but warned that it continues to be seeing the impact of Covid on its theme parks in Asia.

Shares of Disney fell greater than 4% before the bell Thursday. The stock move comes after the corporate’s shares hit a 52-week low of $104.79 earlier Wednesday.

Disney reported that total Disney+ subscriptions rose to 137.7 million through the fiscal second quarter, higher than the 135 million analysts had forecast, in accordance with StreetAccount.

The corporate expects Disney+ net adds to be stronger in second half than first half however the rate of change “will not be as large as previously anticipated,” CFO Christine McCarthy said through the company’s earnings call Wednesday.

Moreover, average revenue per user (ARPU) for domestic Disney+ subscribers was up 5% to $6.32.

“Our strong leads to the second quarter, including incredible performance at our domestic parks and continued growth of our streaming services — with 7.9 million Disney+ subscribers added within the quarter and total subscriptions across all our DTC offerings exceeding 205 million — once more proved that we’re in a league of our own,” said CEO Bob Chapek in an announcement Wednesday.

Listed below are the outcomes:

  • Earnings per share: $1.08 adj.
  • Revenue: $19.25 billion, which incorporates a $1 billion reduction resulting from the early termination of some licensing agreements
  • Disney+ total subscriptions: 137.7 million vs. 135 million expected, in accordance with StreetAccount

Investors were keen to see Disney’s subscription numbers after Netflix reported a lack of 200,000 subscribers during its most up-to-date quarter, its first decline in paid users in greater than a decade. The corporate forecast a world paid subscriber lack of 2 million for the second quarter.

Shares of Disney have slumped 30% since January and greater than 40% compared with the identical time last 12 months, as investors wonder if the corporate can sustain its streaming growth and query how increased inflation and a possible recession could impact its other business ventures.

The corporate showed signs of bouncing back from Covid restrictions.

Disney’s parks, experiences and products segment saw revenues greater than double to $6.7 billion through the quarter, in comparison with the prior-year period. The corporate said growth was fueled by increased attendance, hotel bookings and cruise ship sailings in addition to higher ticket prices and better spend on food, beverage and merchandise.

Disney said its domestic parks are starting to see the return from international travelers, but not at the degrees the corporate saw before the pandemic. This group of tourists once accounted for 18% to twenty% of guests.

Moreover, not all of its international parks have been open full-time through the last quarter. While Paris Disneyland is celebrating its thirtieth anniversary, Shanghai Disneyland and Hong Kong Disneyland each experienced temporary closures on account of local Covid spikes.

While the Hong Kong location reopened April 21, Shanghai stays closed. McCarthy noted that overall parks, experiences and consumer products segment operating income in the present quarter could see a $350 million impact due to these closures in Asia.

Read the earnings release here.

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