Media and entertainment conglomerate Disney (DIS) shattered the fiscal estimates of the first quarter late Thursday with a surprising gain as the number of stream subscribers rose. Disney stock has risen.
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Disney Earnings Report
EstimatesAnalysts expect Disney to hit a loss of 45 cents a share to the EPS of $ 1.53 a year ago as revenue drops 24% to $ 15.8 billion, according to Zacks Investment Research.
Results: EPS of 32 cents on revenue of $ 16.25 billion. Park revenues fell 53% to $ 3.59 billion. The operating segment of the park segment was affected by $ 2.6 billion. Disney sees costs related to regulations and security measures of $ 1 billion in fiscal 2021.
Media and entertainment revenue fell 5% to $ 12.66 billion. Within the unit, direct revenue, which includes Disney + and other streaming services, rose 73% to $ 3.5 billion.
Disney + subscribers climbed to 94.9 million, up from 86.8 million from December 2 and 258% from a year ago. They will give a bigger boost in March, when the monthly fee rises by $ 1 to $ 7.99 in the US and by 2 euros to 8.99 euros per month in Europe. ESPN + subscribers rose 83% year-on-year to 12.1 million and Hulu 30% to 39.4 million.
As theme parks and theaters remain closed and cruise ships are moored, growth is growing. Disney + represents 6% of the consumer’s average time streamed weekly in December 2020, while opposing Netflix (NFLX) declined slightly to 28% from 31% in December 2019, JPMorgan analyst Alexia Quadrani wrote in a note to clients.
According to Nielsen’s rankings, Pixar’s “Soul” is number 1 during Christmas Week. Programs like “WandaVision” and “The Mandalorian” were big hits for Disney +. ‘The Mandalorian’ has also made headlines in recent days for another reason. Lucasfilm, which produces the Star Wars series, announced yesterday that it has fired star Gina Carano, who played former rebel soldier Cara Dune, for controversial political comments on social media.
Disney Stock
Shares rose 3.5% after closing 0.7% at 190.91 on the stock market today. Shares of Disney have risen above a buy point of 183.60 and are still within buying distance of a flat base, according to the MarketSmith chart analysis.
Its relative strength line, which compares the performance of a stock with that of the S&P 500, is rising. Disney shares have an RS rating of 73 out of a possible 99.
Among streaming competitors, Netflix fell 1% on Thursday, appeal (AAPL) lost 0.2%, and Amazon (AMZN) decreased 0.7%.
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Will California parks reopen soon?
Disney shares got a lift earlier this week when Disneyland president Ken Potrock told employees that a ticket food event was underway in mid-March for California Adventure. Company officials said the event would take place several days a week with a reduced capacity.
The event would bring about 1,000 workers back to the park and raised hopes for a larger opening, which would help reduce a huge resistance at Disney and Disney.
According to media reports, Disneyland is also considering a day ticket when the park reopens. This means that pass holders can visit the park at a reduced price for certain parts of the day. This will enable park rangers to control the crowd as they reopen during a pandemic.
Meanwhile, lawmakers in California last week filed a bill that would allow Disneyland to reopen sooner than the current plan. The bill seeks to place theme parks in the Orange (moderate) Level 3 of the state’s Covid-19 guideline for the reopening of amusement and theme parks. Currently, theme sections cannot reopen until the province in which they live has reached yellow (minimum) level 4.
In December, the guidelines were changed to allow small parks to reopen in Tier 3. The bill asks authorities to treat large and small parks equally.
If the bill passes, Disneyland can only work with a capacity of 25%. Disneyland has been closed since March 2020. It is not expected to reopen before spring or summer.
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Disney + Forward Attack
During the pandemic, the streaming service was a bright spot for Disney shares, and big plans lie ahead.
At an Investor Day event on December 11, management said there are more than 100 titles for Disney + in the works. CEO Bob Chapek said the company will have 230-260 million Disney + subscribers by 2024. This is higher than the previous estimate of 60 to 90 million for the same period.
Meanwhile, US customers who signed up for Disney + stay through promotional offers. Verizon (VZ) said more than two-thirds of customers who launched the initial Disney + promotion preferred to maintain the subscription through Verizon, or by opting in to a mix-and-match plan that the Disney bundle contains free, Quadrani said.
Follow Adelia Cellini Linecker on Twitter @IBD_Adelia.
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