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Disney Stock Tanks After Bob Chapek Touts “Record Results”

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.

ESPN bets

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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.

Disney Emporium

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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.

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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.

About Krysten Swensen

A born and bred New England girl living the Disney life in Southern California. I love to read, to watch The Golden Girls, and love everything to do with Disney and Universal. I also love to share daily doses of Disney on my Disney Instagram @BrazzleDazzleDisney!