On May 7, local time, Disney (DIS.US), the world's largest media and entertainment giant with Marvel and Star Wars, jumped and plummeted 9.51%, and the company currently closed at $105.39 per share, with a market value of about $193.3 billion.
On the news side, Disney announced its results for the second quarter of fiscal year 2024 (that is, the first quarter of 2024), the company recorded revenue of $22.08 billion, a year-on-year increase of only 1.2%, which fell short of market expectations, mainly due to the decline in traditional TV business and the drag of box office weakness, while adjusted earnings per share were $1.21, slightly higher than market expectations.
In addition, the company's subscribers fell short of expectations, with the total number of subscribers of Disney's streaming service "Disney+" as of March 30 at 153.6 million, also lower than market expectations. As a "century-old store", Disney wants to maintain its dominant position in the streaming competition surrounded by strong competitors and attract more users, which may not be an easy task.
It is worth mentioning that Disney's core streaming business performed well in the first quarter, with the company's "direct-to-consumer" (DTC) business (including Disney+ and Hulu) making a profit for the first time, achieving an operating profit of $47 million, compared with a loss of $587 million in the same period last year.
If you include the sports streaming platform ESPN+, Disney's overall streaming business lost $18 million, which is also far less than the $659 million loss in the same period last year. Disney expects the overall streaming business to be fully profitable by the fourth quarter of this year.
Since the release of Disney+ in 2019, the company's streaming business has been mired in losses, which is also the main direction of Disney's "arms race" with giants such as Netflix and Warner Bros.
In addition, in the first quarter, the overall operating profit of Disney's theme parks division rose to approximately $2.3 billion, an increase of approximately 12% year-on-year, mainly due to the strong performance of international markets, especially Hong Kong.
Overall, it looks remarkable, but Disney raised its full-year earnings growth forecast from 20% to 25%, which is lower than Wall Street's previous expectations, and the "hawkish" comments of Federal Reserve officials have significantly increased the market's cautious attitude, which may be one of the reasons for the heavy fall in Disney's stock price.
Author: Flying Fish