Disney’s Q1 earnings were better than expected, and the share price of chaonaifei, a new subscriber of Disney + Rose 8% after hours via /r/wallstreetbets #stocks #wallstreetbets #investing


Disney’s Q1 earnings were better than expected, and the share price of chaonaifei, a new subscriber of Disney + Rose 8% after hours

Walt Disney Co., the world’s largest entertainment company The first quarter results report released after hours on Wednesday showed that earnings per share and revenue exceeded expectations, and streaming media subscribers approached 130 million, reversing the downward trend. After the earnings announcement, Disney’s share price soared 8% in after hours trading.

The quarterly financial report as of January 1, 2022 shows that Disney’s adjusted earnings per share in the first fiscal quarter is $1.06, and the market is expected to be 63 cents; The revenue was US $21.82 billion, compared with us $16.25 billion in the same period last year, and the market expectation was US $20.91 billion; The total subscribers of its streaming media service Disney + were 129.8 million, higher than 118.1 million in the previous fiscal quarter, and the market expectation was 125.75 million.

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The growth of streaming media subscribers remains strong

In the first fiscal quarter, the revenue of Disney’s media and entertainment distribution business reached US $14.59 billion, a year-on-year increase of 15%; The operating profit reached US $808 million, a year-on-year decrease of 44%.

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The number of subscribers to Disney + increased by nearly 12 million to 129.8 million in the first quarter. This means that in the last three months of 2021, Disney’s user increment has exceeded that of streaming media giant Netflix. As Netflix admitted last month, competition may be eroding its user base. Netflix added 8.3 million new users in the last quarter, and its total number of global users reached 222 million.

The average revenue per user (ARPU) of Disney + in the United States and Canada also increased to $6.68 from $5.80 a year ago.

Disney has invested billions of dollars in new programs, hoping to take a share in the online video market dominated by Netflix and bet its future on a direct to consumer strategy.

Disney executives had expected Disney + to see stronger growth in subscriptions in the second half of this year than in the first half. More original content will be released on the platform in the fourth quarter of 2022.

Christine McCarthy, Disney’s chief financial officer, said on the earnings conference call that the company expected to invest a lot of money in streaming media in the second quarter. She said that the company’s program and production costs for direct consumer business are expected to increase by about $800 million to $1 billion, including the program production costs of Hulu live broadcast.

Bob chapek, CEO of the company, said Disney was bidding for the broadcasting right of NFL Sunday tickets to further deepen streaming media.

Although Netflix’s latest financial report showed that the growth of users slowed down and led to a sharp drop in its share price, chapek reiterated the performance guidance that Disney + users will reach 230 million to 260 million by 2024.

Return of Paradise business

As concerns about Omicron subsided, the relaxation of government restrictions and the release of pent up demand brought strong traffic to Disney theme park.

The revenue of Disneyland, experience and consumer goods reached $7.2 billion in the quarter, twice that of $3.6 billion in the same period last year. The division’s operating profit jumped to $2.5 billion, compared with a loss of $100 million in the same period last year.

Disney said the revenue growth came from more guests visiting its theme park, staying in brand hotels and booking cruise ships.

After closing most Disney branded retail stores in the second half of 2021, the company’s consumer goods business revenue decreased by 8.5% to $1.5 billion.

“This year is the last year of Walt Disney’s first 100 years. Such achievements, coupled with our unparalleled collection of assets and platforms, creative ability and unique position in culture, make me very confident that we will continue to define entertainment in the next 100 years.” Chapek said.

After the announcement of the financial report, Disney’s share price soared 8% after trading on Wednesday. The stock closed up 3.33% at $147.23 in regular trading. However, since the beginning of the year, the stock has fallen by more than 6%.

Submitted February 10, 2022 at 10:13AM by lilyxu185
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