By
Tolu Ajiboye
February 9th, 2024
Following the release of the earnings report, Disney stock declined by 0.73% to close at $87.49. After hours, Disney shares added 2.24%. Year-to-date, Disney stock is 0.70% up.
The Walt Disney Company (NYSE: DIS) has reported its results for the fiscal third quarter of 2023. The Q3 results are quite controversial as the company has posted missing revenue in line with high losses driven by a decreasing number of subscribers.
Disney and Its Performance in Fiscal Q3 2023
One of the world’s largest financial data providers Refivitiv expected the fiscal quarter’s revenue of Disney to make up $22.5 billion. Meanwhile, the company generated $22.33 billion for the third quarter and nine months that ended on July 1, 2023. Disney reported $1.03 earnings per share, which is down from $1.09 in fiscal Q3 2022. Earnings per share from continuing operations have reportedly decreased to $1.14 from $1.66 in the prior-year period.
Further, diluted earnings per share (EPS) from continuing operations for the quarter was a loss of $0.25 compared to income of $0.77 for a similar period last year.
Disney CEO Robert A. Iger stated:
“Our results this quarter are reflective of what we’ve accomplished through the unprecedented transformation we’re undertaking at Disney to restructure the company, improve efficiencies, and restore creativity to the center of our business.”
Notably, over the last four quarters, Disney has managed to top analysts’ revenue estimates only once.
The net loss reported by Disney for fiscal Q3 2023 has totalled $460 million, or 25 cents per share. Besides, the company posted $2.65 billion in one-time charges and “content impairments”.
The lower-than-expected revenue and enormous losses have resulted from a significant decline in Disney’s subscriber base. The company has reported a 7.4% decrease in Disney+ subscribers. In the US and Canada alone, the service has lost 300,000 subscribers.
The majority of subscriber losses came from Disney+ Hotstar which saw a 24% drop in users as a result of issues with access to Indian Premier League cricket matches.
Following the release of the earnings report, Disney stock declined by 0.73% to close at $87.49. After hours, Disney shares added 2.24%. Year-to-date, Disney stock is 0.70% up.
Disney to Raise Prices for Streaming Services
To recover the losses, Disney is planning to raise prices for its streaming Disney+ and Hulu subscriptions. Starting on October 12, both services will add $3 to their prices. Disney+ will cost $13.99 per month, up from $10.99, while a Hulu subscription will be priced at $17.99, up from the $14.99 before.
Only those who choose ad-free subscriptions will have to pay more. For subscribers who opt for ad-supported services, the prices will remain the same.
For $19.99 per month, you can enjoy “Duo Premium” – a bundle of ad-free experiences for both Disney+ and Hulu, the plan will be available starting from September 6.
As Robert Iger has explained, the new pricing policy targets to push Disney+ subscribers to ad-supported options.
Robert Iger said:
“The advertising marketplace for streaming is picking up. It’s more healthy than the advertising marketplace for linear television.”
Later this year, Disney is also planning to stop password sharing allowing to use its streaming services from different devices for free and launch a paid sharing instead.