Disney (DIS.US) shares are losing nearly 8% today after a report that disappointed investors. The reason for the declines is the streaming platform's poor performance and slower sales.
- Disney's profits fell for the third consecutive quarter by 13% year-on-year to $0.93 per share. Revenues rose 13.3% to $21.82 billion amid slower sales growthin Q1;
- Nearly $7.78 billion in revenue came from the parks, experiences and products segment. In 2022 in the same quarter, Disney reported $6.65 billion. The growth rate of 17% y/y is far outpacing inflation;
- According to management, the company is still on track to save at least $5.5 billion in a massive restructuring that includes splitting into three segments and cutting 7,000 jobs.
The results came in roughly in line with analysts' expectations from FactSet but investors focused on the company's projected growth rate in the coming quarters and lower than expected subscriptions in Disney+.
Start investing today or test a free demo
Create account Try a demo Download mobile app Download mobile appWeakness in streaming weighed on results?
- Combined Disney+, Hulu and ESPN+ subscribers came in below forecasts by nearly 7 million subscribers, rising to 231.3 million from 205.5 million in Q1 2022 and down 1.4% q/q. Wall Street had predicted that the company's subscribers would grow to 238.88 million;
- Within the streaming segment, Disney reported a quarterly operating loss of $659 million, down 26% from the same period last year. The company related this to better results from Disney+ and ESPN+ offset by weakness from Hulu. P
- Before the end of the year, Disney intends to merge Hulu and Disney+ into one app. The entertainment giant has indicated that the ad-free Disney+ subscription option will see a price increase later this year.
The streaming business is seeing some slowdown but noteworthy is the fact that the loss it generates is narrower. A key threat to all Disney segments could be the recession. A slowing economy and weaker labor market could significantly affect entertainment spending (including at Disney parks) and potentially - the streaming business as well. Recessionary concerns are a significant backdrop to the company's stock declines.
Disney shares (DIS.US), D1 interval. The company's shares have settled below the key averages SMA100 and SMA200, as well as the 71.6 Fibo retracement of the March 2020 upward wave. In a situation of extremes, the stock may look for final support at the level of $76,- the level of bottom pandemic sell-off. Source: xStation5
The content of this report has been created by XTB S.A., with its registered office in Warsaw, at Prosta 67, 00-838 Warsaw, Poland, (KRS number 0000217580) and supervised by Polish Supervision Authority ( No. DDM-M-4021-57-1/2005). This material is a marketing communication within the meaning of Art. 24 (3) of Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU (MiFID II). Marketing communication is not an investment recommendation or information recommending or suggesting an investment strategy within the meaning of Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC and Commission Delegated Regulation (EU) 2016/958 of 9 March 2016 supplementing Regulation (EU) No 596/2014 of the European Parliament and of the Council with regard to regulatory technical standards for the technical arrangements for objective presentation of investment recommendations or other information recommending or suggesting an investment strategy and for disclosure of particular interests or indications of conflicts of interest or any other advice, including in the area of investment advisory, within the meaning of the Trading in Financial Instruments Act of 29 July 2005 (i.e. Journal of Laws 2019, item 875, as amended). The marketing communication is prepared with the highest diligence, objectivity, presents the facts known to the author on the date of preparation and is devoid of any evaluation elements. The marketing communication is prepared without considering the client’s needs, his individual financial situation and does not present any investment strategy in any way. The marketing communication does not constitute an offer of sale, offering, subscription, invitation to purchase, advertisement or promotion of any financial instruments. XTB S.A. is not liable for any client’s actions or omissions, in particular for the acquisition or disposal of financial instruments, undertaken on the basis of the information contained in this marketing communication. In the event that the marketing communication contains any information about any results regarding the financial instruments indicated therein, these do not constitute any guarantee or forecast regarding the future results.
