Shares in The Walt Disney Company (NYSE:DIS) fell around 8% in after-hours trading after the group reported lower-than-expected profits and revenue for the fourth quarter and warned that strong streaming growth for its Disney+ platform may slow down going forward.
Adjusted earnings per share of 30 cents was below Wall Street forecasts of 55 cents, while revenue of US$20.15bn was below the US$21.24bn expected.
But Disney+ total subscriptions of 164.2mln were ahead of the 160.45mln forecast.
Chief financial officer Christine McCarthy also tempered investor expectations for the new financial year, forecasting revenue growth of less than 10% compared to 22% in fiscal 2022.
Fourth-quarter revenue in the media and entertainment division fell 3% year over year to US$12.7bn, below forecasts of US$13.9bn, as the company’s direct-to-consumer and theatrical businesses struggled.
The company also posted lower content sales because there were fewer theatrical films on the calendar and therefore fewer films to place into the home entertainment market.
Growth in Disney+ subscriptions is expected to slow in the fiscal first quarter but Disney CEO Bob Chapek said the business will achieve profitability in fiscal 2024.
"We believe we are on a path to a profitable streaming business, assuming that we do not see a meaningful shift in the economic climate," he said on a conference call to discuss the firm's results.
The company is set to hike prices for the service in December and is planning an ad-supported tier, which is expected to boost revenue.