By
Tolu Ajiboye
February 9th, 2024
Disney added 12.1 million subscribers during this period, pushing their total subscribers to 164.2 million, exceeding analysts’ expectations of 160.45 million.
The Walt Disney Company (NYSE: DIS) has fallen short of expectations for profit and key revenue segments during its fiscal Q4 2022. The multinational mass media company also disclosed that the strong streaming growth for its Disney+ platform may hinder future increases. Shortly after the report, Disney’s share fell by 8%. The unveiled result was far below wall street analysts’ expectations; the park and media division performed below the estimations. Many investors expected Disney to record revenue growth of less than 10% for the fiscal year. However, Christine McCarthy, the company’s Chief Financial Officer, announced fiscal quarterly revenue growth of 22%.
The Disney fiscal Q4 revenue in the media and entertainment division fell by 3% year-on-year to $12.7 billion. The company struggles to gain direct-to-consumer and theatrical businesses. StreetAccount analysts expected the mass media company to remit a revenue of $13.9 billion. The reports also recorded low content sales due to the scanty theatrical films on the calendar, invariably reducing the film output in the home entertainment market.
How Disney Performed in Fiscal Q4 2022
From July to September, the company performed below expectations in three major aspects: Earnings Per Share (EPS), revenue, and Disney+ total subscriptions. Analysts expected Disney to make 55 cents per share and $21.24 billion in revenue, respectively. On the contrary, Disney made 30 cents per share and $20.15 billion, as reported in the fiscal Q4 revenue. On the brighter side, Disney added 12.1 million subscribers during the period, pushing their total subscribers to 164.2 million, exceeding analysts’ expectations of 160.45 million.
Moving on, Disney executives have warned of reduced subscriber growth in the first quarter. Recent information shows that other top streaming platforms like Hulu, ESPN+, and Netflix (NASDAQ: NFLX) reportedly have 47.2 million, 24.3 million, and 235 million subscribers, respectively.
According to Disney CEO Bob Chapek, the company’s revenue will be highly profitable by fiscal 2024. He noted that the direct-to-consumer division lost $1.47 billion last quarter. Disney plans to hike its streaming prices in December. In addition, the company will set up an ad-supported tier, which would help boost revenue.
The Disney CEO also reported results for the park, experiences, and products segment. The company’s theme parks, resorts, cruise line, and merchandise business recorded a 34% revenue increase to $7.4 billion. Despite the outstanding growth, the company’s revenue fell short of expectations of $7.5 billion. According to the fiscal Q4 reports, the operating income of Disney also rose by 66% to $1.5 billion. The park’s unit single-handedly generated a revenue of $815 million, a decline below the $919 million expected. McCarthy has disclosed that the company is currently examining the company’s cost base and hopes to provide meaningful efficiencies.