Shares of Walt Disney Co. (DIS) are down 8% after the world’s largest entertainment company
reported third-quarter sales and profit that missed Wall Street expectations.
The Mouse House blamed the poor Q3 results on weak advertising revenue and mounting
losses in its streaming TV business unit.
Earnings per share came in at $0.30 U.S., missing the average estimate of $0.55 U.S. Sales in
the third quarter came in at $20.15 billion U.S., nearly $1 billion U.S. short of forecasts.
The results were the biggest quarterly earnings miss for Disney since the early 1990s.
Disney did manage to beat expectations for its number of streaming subscriber additions in the
quarter, adding 12.1 million new customers at its flagship Disney+ service. Total subscribers,
including those for Hulu and ESPN+, rose to almost 236 million.
Losses at Disney’s streaming service unit, led by Disney+, more than doubled to $1.47 billion
U.S. due to higher content development expenses. The company forecasts that Disney+ will
achieve profitability in 2024.
On December 8 this year, Disney will begin selling a version of Disney+ that includes
advertisements at a monthly cost of $8 U.S. The price of its ad-free version will rise nearly 40%
to $11 U.S. per month.
Profit at Disney’s theme-park unit more than doubled to $1.51 billion U.S., due to higher
attendance and increased spending, but fell short of analysts’ estimates.
Revenue from Disney’s traditional TV business, which includes networks such as ESPN and
ABC, fell 5% due to advertising weakness.
Shares of Disney fell as much as 8% to $92 U.S. per share after the financial results were made
public. The stock is down 36% on the year.
