5 key takeaways from Disney’s Q2 financial results
- Disney's sales come in lower than expected in the fiscal second quarter.
- Ivan Feinseith sees the pullback in Disney as a buying opportunity.
- Disney Plus hits 100 million subscribers milestone in the second quarter.
The Walt Disney Co. (NYSE: DIS) said on Thursday its sales in the fiscal second quarter came in lower than expected. It, however, topped estimates for adjusted per-share earnings. Disney shares were reported a little under 5% down in extended trading on Thursday.
1. Financial performance
Disney reported £641.11 million of earnings in the second quarter that translates to 34.87 pence per share. On an adjusted basis, it earned 56.21 pence per share in Q2 versus the year-ago figure of 42.69 pence per share.
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The mass media company generated £11.11 billion of sales in the recent quarter – a decline from £12.81 billion last year. According to FactSet, experts had forecast the company to post £11.29 billion of sales in the second quarter and 18.50 pence of adjusted EPS. In the prior quarter, Disney had posted £8.39 billion of revenue.
2. Disney Plus results
Disney Plus now boasts 103.6 million subscribers in total. Including Hulu and ESPN+, Disney has 158.8 million total streaming subscribers. In comparison, analysts had anticipated 109.26 million subscribers for Disney Plus by the end of the second quarter and 161.67 million total streaming subscribers. Streaming segment, as per the Burbank-based company, generated £2.85 billion of sales in Q2 versus £2.88 billion expected.
3. Other notable figures
Disney valued its sales from the media and entertainment business at £8.85 billion in the second quarter, with its traditional linear TV networks contributing £4.80 billion. Theme parks and product sales, on the other hand, printed at £2.26 billion. FactSet consensus for sales from these segments stood at £9.07 billion and £880 million, respectively.
4. Guidance for the future
CFO Christine McCarthy refrained from giving full financial forecast on Thursday but said:
“Forward-looking bookings for park reservations at both of our domestic parks are strong, demonstrating the strength of our brands as well as growing travel optimism as case counts decline, vaccine distribution ramps, and government restrictions loosen.”
According to CEO Bob Chapek, however, Disney Plus is on track to achieve its guidance of up to 260 million subscribers by the end of fiscal 2024.
5. Ivan Feinseith’s remarks on CNBC’s “Closing Bell”
Commenting on Disney’s earnings report on Thursday, Tigress Financial Partners’ Ivan Feinseith said on CNBC’s “Closing Bell”:
“You never want to see misses, especially on a key metric in this case, which is subscribers. But there are so many things going on that will help Disney. You have parks reopening, theatres reopening, studios reopening. So, I think this pullback is a buying opportunity. They did well, they survived well during the pandemic, and they will do exceptionally well in a post-pandemic environment.”