Disney posted higher earnings and profits, while analysts expected losses. The success of streaming services has offset the loss of amusement parks.
Disney (DIS) shares, which gained nearly 45% over the past six months, gained 1.3% on Thursday after the close of trading, as investors positively evaluated the company’s first financial quarter results, which ended January 2.
In comments to the report, Disney executives noted that the company’s revenues and earnings continued to be negatively impacted by the pandemic. Disney’s largest “Parks and Amusement” segment brought in less than half of sales due to Disneyland closures and visitor restrictions on those parks that were open during the quarter.
At the same time, the company has made brilliant success in adding new subscribers to its streaming video service Disney + and others, with total paid subscriptions surpassing 146 million at the end of the quarter.
Disney + says the company is happy with the conversion and reaching nearly 95 million paying subscribers, even after the free trial for those subscribers who are also Verizon (VZ) customers ended in the first quarter.
Disney did not give forecasts of revenues and profits for future periods, but announced that it plans to release the Marvel action movie Black Widow starring Scarlett Johansson in theaters on May 7.
The company also said it expects safety spending in parks and television and film production to reach $ 1 billion in 2021.
Disney Key Figures
Disney reported first-quarter earnings per share of $ 0.32, far better than analysts’ estimates of $ 0.41 loss per share. The figure is better than the figures for the previous three quarters affected by the pandemic, but almost 80% lower than the figures for the same quarter of the last financial year.
Total revenues rose from the previous two quarters to $ 16.25 billion and were also above the analytic average of $ 15.88 billion, but 22% below last year’s value. Disney’s quarterly earnings and earnings statistics for the last 2 years are available here.
The media division, which includes multiple channels, film studios and streaming services from Disney, ESPN + and Hulu, accounted for the bulk of Q1 sales and profits, with revenues of $ 12.66 billion (down 5% year-on-year), profits down 2% to $ 1 , 45 billion
Disney + will expand into Eastern Europe, South Korea, Hong Kong and other countries this year, the company said.
The segment “Parks and Amusement” (Disney Parks, Experiences and Products), which brought the largest income before the pandemic, earned $ 3.59 billion, which is 53% lower than last year and suffered a loss of $ 119 million in contrast to the profit of $ 2. 52 billion in the first quarter of the last fiscal year.
Disney executives said the parks segment’s recovery will depend on the pace of vaccine adoption, with visitor cap measures expected to continue through the end of 2021.
According to CFO Christine McCarthy, the company expects California’s largest Disneyland and Paris Disneyland to remain closed until March, and hopes its Hong Kong park will reopen by April.
Disney said it will invest more in the media and entertainment segment and less in the parks segment during fiscal 2021.
Disney expects Disney + to have 230-260 million subscribers by 2024, up from a previous estimate of 60-90 million in the same time period, with global subscriptions for all services reaching 300-350 million. By comparison, Netflix (NFLX) has 195.15 million subscribers.