On November 8, The Walt Disney Company held its 4th Quarter Earnings Call. During the call, Disney CEO Bob Chapek offered a very positive outlook on the numbers, calling this year some of Disney’s “best storytelling yet” and reports revealed that Disney had made a mind-boggling $28 billion profit. Chapek also revealed that Disney added more than 12 million subscribers to its Disney+ and streaming platforms worldwide and that the streamer was still on target to be profitable by 2024.
Disney Parks, Products, and Experiences were some of the most profitable areas for Disney, but that could simply be because Disney is charging sky-high prices and offering less, so, naturally, Guest spending will be up.
Even though Disney+ added millions of subscribers, the “revenue-per-user” came in under what analysts were predicting. Disney also shared that Disney+ subscriber growth is expected to fall in the next quarter. Disney’s consumer products numbers also came in below expectations, which caused Disney’s stock to take a massive hit after the Earnings call. The stock market as a whole took a slight hit, but Disney seemed to get hammered.
Here’s more on Disney’s underperformance and what could have caused it, via MarketWatch:
Disney executives blamed a number of factors for the revenue miss, including lower content sales because they had fewer theatrical films on the calendar; underperformance of the parks and media divisions; and seasonality of its fourth quarter, which tends to be the lowest for margins.
In a conference call Tuesday afternoon, though, Chief Financial Officer Christine McCarthy suggested that revenue and profit growth will slow to single digits on a percentage basis in the current fiscal year, missing Wall Street’s expectations. Analysts’ average revenue projection for Disney in the new fiscal year suggested revenue growth of about 13.9% and operating-income growth of roughly 17.4%, according to FactSet.
After-hours trading saw Disney’s stock take a 10% drop before finally closing down 6.8%. When regular trading ended, the stock was only down .5%, so the Earnings call is most likely responsible for the hard hit.
It has been a rough year for Disney, whose stocks are down more than 35% from last year’s numbers.