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Disney (DIS) fiscal Q3 2022 earnings

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A performer dressed as Mickey Mouse entertains guests through the reopening of the Disneyland theme park in Anaheim, California, U.S., on Friday, April 30, 2021.

Bloomberg | Bloomberg | Getty Images

If Disney+’s subscriber growth is any indication, the rumors that the worldwide streaming market is nearing saturation have been proven unfaithful.

On Wednesday, the Walt Disney Company reported that total Disney+ subscriptions rose to 152.1 million through the fiscal third quarter, higher than the 147 million analysts had forecast, in response to StreetAccount.

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At the top of the fiscal third quarter, Hulu had 46.2 million subscribers and ESPN+ had 22.8 million. Combined, Hulu, ESPN+ and Disney+ have over 221 million streaming subscribers. Netflix, long the leader within the streaming space, had 220 million subscribers, in response to probably the most recent tally.

Disney shares rose greater than 6% after the closing bell.

The streaming space has been in a state of upheaval in recent weeks, as Netflix disclosed one other drop in subscribers and Warner Bros. Discovery announced a shift in content strategy. While Netflix expects subscriber growth to rebound, uncertainty has left analysts and investors wondering what the longer term holds for the broader industry.

Also Wednesday, the corporate unveiled a latest pricing structure that comes with an advertising-supported Disney+ as a part of an effort to make its streaming business profitable.

Through the fiscal third quarter Disney+, Hulu and ESPN+ combined to lose $1.1 billion, reflecting the upper cost of content on the services. Disney’s average revenue per user for Disney+ also decreased by 5% within the quarter within the U.S. and Canada because of more customers taking cheaper multiproduct offerings.

Starting Dec. 8 within the U.S., Disney+ with commercials will likely be $7.99 monthly — currently the worth of Disney+ without ads. The value of ad-free Disney+ will rise 38% to $10.99 — a $3 monthly increase.

Disney beats earning expectations in second quarter, driven by parks and resorts

As well as, Disney lowered its 2024 forecast for Disney+ to 215 million to 245 million subscribers, down 15 million on each the low end and high end of the corporate’s previous guidance.

Disney had previously set its Disney+ guidance in December 2020 at 230 million to 260 million by the top of fiscal 2024. The corporate reaffirmed its expectation that Disney+ will grow to be profitable by the top of its fiscal 2024 12 months.

Overall, Disney posted better-than-expected earnings on each the highest and bottom line, bolstered by increased spending at its domestic theme parks.

Listed below are the outcomes:

  • Earnings per share: $1.09 per share vs. 96 cents expected, in response to a Refinitiv survey of analysts
  • Revenue: $21.5 billions vs. $20.96 billion expected, in response to Refinitiv
  • Disney+ total subscriptions: 152.1 million vs 147.76 million expected, in response to StreetAccount

Big quarter for parks

Disney’s parks, experiences and products division saw revenue increase 72% to $7.4 billion through the quarter, up from $4.3 billion through the same period last 12 months. The corporate said it saw increases in attendance, occupied room nights and cruise ship sailings.

It also touted that its latest Genie+ and Lightning Lane products helped boost average per capita ticket revenue through the quarter. These latest digital features were introduced to curate guest experience and permit parkgoers to bypass lines for major attractions.

The corporate said it has been in a position to bring back in-park experiences corresponding to character meet-and-greets, theatrical performances and nighttime events at Disneyland, which has allowed it to extend capability at its parks, CEO Bob Chapek said through the company’s earnings call Wednesday. Disney has placed caps on attendance because it reopened after the initial round of pandemic closures in early 2020 and instituted a latest online reservation system to regulate crowds.

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“Because it pertains to demand, we now have not yet seen demand abate in any respect and we still have many days when people cannot get reservations,” Christine McCarthy, Disney’s chief financial officer, said through the company’s earnings call. “So, we’re still seeing demand in excess of the reservations that we’re making available for our guests.”

Per capita spending at domestic parks increased 10% through the most up-to-date quarter, in comparison with the identical quarter last 12 months and is greater than 40% higher than fiscal 2019, the corporate said. Occupancy at domestic hotels within the third quarter was 90%.

Chapek pointed to EPCOT’s latest Guardians of the Galaxy Cosmic Rewind, the launch of the Disney Wish and the opening of Avenges Campus in Paris Disneyland as enhanced offerings for guests which have driven traffic and revenue to this division.

McCarthy noted that international visitors to domestic parks have continued to be slow to return. Traditionally, those parkgoers account for around 17% to twenty% of total guests.

“We expect international visitation when its fully back to really be additive to margins, because those guests are likely to stay longer on the parks they usually spend more cash after they’re there, as well,” she said.

Disclosure: Comcast is the parent company of NBCUniversal and CNBC. Comcast owns a stake in Hulu.

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