Disney Reaches Profitability In Entertainment Streaming
Portfolio Pulse from Upwallstreet
Disney (NYSE:DIS) reported its fiscal second quarter earnings, surpassing analyst estimates with its streaming services, Disney+ and Hulu, achieving profitability for the first time, excluding ESPN. Despite this, Disney's shares fell 10% due to overall revenue disappointment and a soft guidance for the next quarter's experiences segment. Revenue grew 1% YoY to $22.08 billion, slightly missing estimates. Theme parks performed well, but higher labor costs impacted profits. Disney's streaming business saw significant improvement, with a notable increase in Disney+ subscribers. However, content sales and licensing revenue dropped 40%. Disney anticipates its streaming segment to reach profitability in the fourth quarter and become a key growth driver.
May 08, 2024 | 12:17 pm
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NEGATIVE IMPACT
Disney reported fiscal Q2 earnings with streaming services Disney+ and Hulu achieving profitability, excluding ESPN. Despite this, shares fell 10% due to a revenue miss and soft guidance for the next quarter. Theme parks performed well, but content sales and licensing revenue dropped significantly.
Disney's achievement in streaming profitability is overshadowed by its overall revenue miss and the soft guidance for the next quarter, leading to a negative short-term impact on its stock price. The significant drop in content sales and licensing revenue further contributes to the negative outlook.
CONFIDENCE 90
IMPORTANCE 95
RELEVANCE 100
NEUTRAL IMPACT
Disney is making progress in catching up to Netflix in terms of streaming profitability. Disney+ and Hulu reported a combined profit for the first time, excluding ESPN, with Disney+ core subscribers growing by 6 million.
While Disney's progress in streaming profitability is a positive development, it's unclear how this directly impacts Netflix in the short term, as the competitive landscape in streaming services is complex and influenced by multiple factors.
CONFIDENCE 75
IMPORTANCE 60
RELEVANCE 50