Disney drops despite turning first profit in streaming business
Traders on the New York Stock Exchange we not buying what Disney’s financial results were selling – as the stock fell 10% despite an apparent upgrade to the media giant’s financial forecasts.
Disney today told investors that its streaming business was now turning a profit for the first time, helped by Aussie kids TV phenomenon ‘Bluey’ (which is the most watched thing on Disney+ worldwide).
The Disney+ and Hulu subscription streamers made a $47 million profit for the second quarter, compared to a $587 million loss this time last year.
Nevertheless, Disney’s wider entertainment and sports broadcasting business fell short of the market’s revenue forecasts.
The division brought in $9.79 billion of revenue which was down 5% versus the same period last year. It was also below Wall Street predictions of $9.93 billion.
The disappointing return was the result of falling revenues in ‘linear’ TV businesses and as Disney’s light movie slate underwhelmed.
Disney’s ‘Experiences’ business division – which comprises its theme parks and vacation businesses -saw a 9% improvement in revenue, generating $8.39 billion. Specifically, it was driven by a strong performance for Florida’s Walt Disney World Resort and the Disney Cruise Line.
The theme parks benefitted from improved attendance and higher guest spending.
“Looking at our company as a whole, it’s clear that the turnaround and growth initiatives we set in motion last year have continued to yield positive results,” chief executive Bob Iger said in a statement.
He added: “We are turbocharging growth in our experiences business with a number of near- and long-term strategic investments.”
Iger meanwhile said that Disney’s movie business had ‘a number of highly anticipated theatrical releases arriving over the next few months’.
He added, also, that Disney’s TV shows were “resonating with audiences and critics alike”, and, in sports, he said the ESPN “continues to break ratings records” as it continues its evolution into “the preeminent digital sports platform”.
Wall Street was less enthused, with Disney stock down 9.6% or $11.19 per share to change hands at around $105.25 each.
