The Walt Disney Company (NYSE:DIS) shares jumped in after-market trading following forecast-busting earnings as consumers gave their mark of approval on its streaming offering.
The owner of the Marvel Cinematic Universe and Star Wars franchises enjoyed top-line growth of 34%, the $21.82bn figure beating the $20.8bn expected on Wall Street.
Adjusted earnings per share (EPS) of USD$1.06 dwarfed expectations of USD$0.61.
The biggest uncertainty leading into its earnings was the strength of the company’s streaming offering, Disney+, following subsidence by rival Netflix and an air of pessimism in the sector as stay-at-home orders in the US are increasingly being relaxed, puncturing the bumper pandemic-era growth for streamers.
But Disney+ duly delivered, increasing viewership figure by 11.8mln over the quarter, against expectations of 7mln and growth of 2.1mln in the previous quarter, in a sign that new offerings like The Beatles: Get Back, the new unseen footage documentary, and The Book of Boba Fett, the latest output in the Star Wars series, helped pull in more viewers.
Those streaming results keep the company on track to reach its 230mln-260mln users target by the end of fiscal year 2024, with the company now boasting 129.8mln subscribers.
The company’s theme parks division also continued its recovery from pandemic lulls, with pent-up demand aligning with last year’s low base to helped revenues in parks, experiences and products more than double to $7.23bn.
Roberto Rivero, market analyst at Admirals, said the results for parks came as no surprise given these changes to the global economic context over the last year.
"What is surprising is the growth in Disney+ subscriptions. After Netflix’s recent disappointing subscriber growth, it was expected for Disney+ to also show a slowdown in subscriptions.
"However, Disney has breathed confidence back into this beleaguered sector, with the total number of paid subscribers increasing 37% YOY and the company forecasting even stronger subscriber growth in the second half of the year.
"Looking forward, if Disney+ subscriptions continue to grow as forecast and there are no setbacks to the ongoing recovery of the travel industry, we can expect a strong year from Disney.”