February 1, 2023

Disney stock dives after earnings and revenue miss, sales growth forecast to slow after record year

Disney shares fall after profit and revenue losses, sales growth expected to slow after weak year
Written by Dawn Chmielfsky and Lisa Richwin

(Reuters) – The Walt Disney Company missed Wall Street earnings estimates on Tuesday as the entertainment giant lost more than its run in streaming video, sending its shares down 9%.

The company saw more customers online than analysts expected in the July-September period, but media investors are increasingly focusing on earnings in online subscription metrics.

Disney streaming beats Wall Street targets, earnings miss

Disney has spent billions building streaming options and competing with Netflix Inc and others. Its flagship company, Disney+, reported 167 million. The direct-to-consumer media industry lost $1.5 billion during this period.

“The journey is like a Netflix journey,” said Paulo Pescatore, analyst at BB Forsight. “Expect a lot of potential customers and a lot of losses in the broadcasting business because there is no magic bullet to profitability.”

Some media companies are trying to grow their networks while meeting Wall Street earnings expectations.

Paramount Global shares fell after third-quarter results showed growth for streaming service Paramount+, but earnings didn’t miss analysts’ expectations. Warner Bros. Discovery Inc’s HBO Max rebounded with the hit show “Dragon House,” but its stock fell as it struggled to manage expenses and declining advertising revenue.

Disney’s income from continuing operations increased 1% to $162 million in the quarter. Excluding items, Disney gained 30 cents, missing Wall Street’s target of 55 cents a share.

Revenue of $20.15 billion was below the consensus estimate of $21.25 billion.

Disney shares fell about 9 percent to $91.35.

Disney collected 235 million subscriptions across the Disney+, Hulu and ESPN+ platforms, up 14.6 million from the previous quarter. Hulu reported 47.2 million subscribers while ESPN had 24.3 million subscribers.


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