Today we will talk about the report for the second quarter of fiscal 2021 of Walt Disney company, one of the largest media conglomerates in the entertainment industry in the world, and how its shares reacted to the data presented. Let’s start!
Walt Disney Second Quarter Report
On May 13, the report of the transnational media corporation Walt Disney for January-March was published. The biggest gain in analysts’ attention was the growth in paid subscribers to the Disney + streaming platform.
Although the audience of the service increased by 8.7 million users and even reached the level of 103.6 million, the statistics disappointed experts. Paid subscriptions grew by 21.2 million in the first quarter of fiscal 2021, up 59%.
According to Bloomberg, the guys from Wall Street predicted a quarterly increase in the number of paid subscribers by an average of 15.4 million, to 110.3 million. Real data fell short of 6.7 million users, that is, 43.5% less than the predicted result.
Important data from the report
- Revenue – $ 15.6 billion, -13% compared to Q2 2020.
- Earnings per share – $ 0.5, + 96%.
- Net profit – $ 912 million, + 94.9%.
- Revenue of the division of distribution of media and entertainment – $ 12.44 billion, + 1%.
- The revenue of the division, which includes theme parks, is $ 3.17 billion, -44%.
Why the growth rate of the number of subscribers has fallen
The shooting calendar of new content at Walt Disney due to the COVID-19 pandemic, to put it mildly, has been disrupted. But seriously, almost all projects have stopped. Agree, it is difficult to attract a new audience to a paid service without new products in its media library.
Do not forget about the gradual relaxation of quarantine restrictions. Millions of people, in order to entertain themselves in self-isolation or distract from problems, plunged headlong into the endless world of fascinating films, TV series and shows. Now they are fed up with streaming sites and want to return to real life and real entertainment.
Walt Disney Shares Down Almost 3%
On the day of the quarterly report publication, the value of Walt Disney (NYSE: DIS) securities increased by 0.28% to $ 178.34. But already at the end of the next trading session, quotations fell by 2.6%, to $ 173.7. That’s right: Disney +’s new subscriber growth rate has disappointed investors.
Recall that since January, the corporation’s shares have lost only 4%, dropping in price from $ 181.18 to $ 173.7. Over the past 4.5 months, the most successful trading day for the company was March 8: securities rose 6.27%, reaching this year’s high of $ 201.91.
Summing up the result
One of the most popular representatives of the global entertainment industry reported for the second quarter of fiscal 2021. Revenue in January-March lost 13%, but net profit almost doubled.
However, the number of new paid subscriptions did not meet the expectations of investors and analysts – 8.7 million versus 15.4 million. This immediately affected the value of the corporation’s shares, which fell by almost 3%.
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