Disney Fiscal Third Quarter Results, Shares Rise 5%

Disney Segments’ Performance in the Third Quarter

Media Networks

$6.56 billion down 2%

Park, Experiences, and Products

$983 million, down 85%

Studio Entertainment

$1.74 billion, down 55%

Direct-to-Consumer and International

$3.97 billion, up 2%

Disney (DIS) posted results of mixed earnings for its third quarter, on Tuesday. CEO Bob Chapek also announced the launch of a new Disney streaming service, causing the company’s stock to rise 5% in extended trading. Chapek said Disney+ subscribers will have exclusive access to the release of Disney’s Mulan which should have been out since, but was delayed by lockdown directives.

In the just reported quarter which ended on June 27, 2020, Disney posted $11.78 billion revenue compared to analysts’ expected $12.39 billion. The company’s earnings per share saw a slight increase of 8 cents compared to analysts’ loss of 64 cents.

Here’s how Disney performed in the third quarter compared estimates by Refinitiv:

  • Earnings per share, adjusted: 8 cents vs. a loss of 64 cents expected.

  • Revenue: $11.78 billion, vs $12.37 billion expected.

“In an otherwise bleak earnings outlook, Disney’s explosive growth in its streaming business is the one saving grace, which is grabbing investor attention and causing the stock to rise,” said a senior analyst at Investing.com, Haris Anwar.

Disney posted a net loss of $4.72 billion in the fiscal third quarter due to the impact of the coronavirus pandemic and its earlier purchase of Twenty-First Century Fox which didn’t work out well, leading to severance and contract termination, and incurring extra costs and expenses for the company.

Following the announcement of its fiscal third-quarter results, Disney shares initially declined, before it later rose 2% in after-hours trading.

The entertainment giant saw a plunge in its parks and cruises business as a result of the impacts of the coronavirus. Its Park, Experiences, and Products segment was down 85%; and its Studio Entertainment segment was down 55%. However, the company announced that it had surpassed 100 million paid subscribers for its full direct-to-consumer package, which includes Disney+, ESPN+, and Hulu.

“The company is taking full advantage of the stay-at-home environment and adding subscribers at a robust pace,” Anwar said. “Investors are looking beyond the tough quarter to a continued reopening of parks, while Disney+ is expected to see further growth.”

Chapek mentioned in his announcement that Disney+ subscribers will get access to watch the much anticipated Mulan on the platform for $29.99, beginning from September 4, in the United States. It will also be available to subscribers in Canada, Australia, New Zealand, and some parts of Western Europe, at slightly different prices.   

“We’re looking at Mulan as a one-off, as opposed to say, there’s some new business windowing model we’re looking at,” Chapek said last month.

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