Disney reported a failed financial result for the third quarter after Bell Thursday, exceeding Wall Street’s expectations for subscriber growth, revenue and earnings.
The shares rose more than 5%.
- Earnings per share: 80 cents compared to 55 cents expected in a refinitive poll of analysts
- Revenue: $ 17.02 billion versus $ 16.76 billion expected in the survey
The company beat subscriber estimates for Disney + at 116 million. StreetAccount estimates the company had 114.5 million subscribers in the third quarter. The segment had 103.6 million euros in the second fiscal quarter.
Disney + ‘s average monthly revenue per subscriber decreased 10% year over year to $ 4.16. The company attributed the decline to a higher proportion of Disney + Hotstar subscribers compared to the prior-year quarter.
Disney’s average revenue per user has shrunk in recent quarters due to lower prices for its Disney + and Hotstar packages in Indonesia and India. The service has lower average monthly revenue per paying subscriber than traditional Disney + in other markets, pulling the overall average for the quarter down.
The company said it had almost 174 million subscriptions to Disney +, ESPN + and Hulu at the end of the third quarter. Revenue for its direct-to-consumer segments increased 57% to $ 4.3 billion. Average monthly revenue per paying subscriber increased slightly for ESPN + and Hulu.
Parks segment returns to profitability
Disney’s Parks, Experiences and Products segment returned to profit for the first time since the pandemic began, even though the parks on their own are not yet profitable.
Disney Parks, Experiences and Products revenue increased 307.6% to $ 4.3 billion as all parks reopened in the third quarter of fiscal year and as visitor numbers and consumer spending increased.
Much of this profitability is due to the segment’s consumer products business, which posted operating income of $ 564 million. During the quarter, Disney had higher revenue from merchandising items based on Mickey and Minnie, Star Wars, Disney Princesses, and Spider-Man. Domestic theme parks, resorts and experiences posted positive operating income of $ 2 million while international posted a loss of $ 210 million.
Disney’s domestic parks eased restrictions in April, which led to a surge in visitor numbers. Domestic parks reported additional operating income of $ 2 million. International parks posted a loss of $ 210 million.
Disney had reported a loss of operating profit in the segment in each of the last five quarters due to the Covid-19 pandemic. The company’s third quarter operating income from parks, experiences and products reached $ 356 million, compared to a loss of $ 1.87 billion for the year-ago quarter.
In late July, rival Comcast, which owns and operates several Universal Studios theme parks in the US and on board, reported a profit with its parks, marking the division’s first profitable period since Q1 2020.
Revitalizing the theme park industry is critical to Disney’s bottom line. In 2019, the segment, which includes cruises and hotels, represented 37% of the company’s total revenue of $ 69.6 billion.
Content sales and licensing revenue decreased 23% to $ 1.7 billion for the quarter. At the same time, operating income fell 58% to $ 132 million.
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Correction: This story has been updated to reflect that Disney’s US parks were profitable again while international parks were not.
Disclosure: Comcast is the parent company of NBCUniversal and CNBC. NBCUniversal operates Universal Studios theme parks. Comcast has a stake in Hulu.