Media and entertainment giant Walt Disney Co (NYSE: DIS) reported better-than-anticipated fiscal 2021 third-quarter earnings and revenues. The company’s upbeat quarterly performance was aided by a revival in the theme park visitors in addition to better-than-anticipated growth of its Disney+ streaming division.
However, Walt Disney cautioned investors about the uncertainty caused by the rising COVID-19 infections (Delta variant) on its business performance. The stock ended Friday’s trading session at $181.08, up $1.79 or 1% from the prior close.
The Burbank, California-based company, recorded third-quarter 2021 revenues of $17.022 billion, an increase of 45% from $11.779 billion in the similar quarter of 2020.
For the quarter ended July 3rd, 2021, Walt Disney reported a swing to profit of $918 million, or $0.50 per share, compared with a net loss of $4.721 billion, or $2.61 a share, in the quarter ended June 27th, 2020.
Excluding amortization of TFCF and Hulu intangible assets and fair value step-up on film and television costs, and restructuring and impairment charges, among others, Walt Disney posted 3Q 2021 non-GAAP earnings of $1.687 billion, or $0.80 per share, an increase from $360 million, or $0.08 a share in 3Q20.
On average, analysts polled by Refinitiv had anticipated the company to report earnings of $0.55 per share on revenues of $16.76 billion for the third quarter.
Segment-wise,
- Disney Media and Entertainment Distribution revenues rose by 18.30% y-o-y to $12.681 billion. Specifically, Linear Networks revenues grew 16% to $6.956 billion. Direct-to-Consumer revenues were $4.256 billion, an increase of 57% on a y-o-y basis. Content sales/licensing and other revenues fell by 23% to $1.681 billion.
- Disney parks, experiences, and products revenues were $4.341 billion, an increase of 307.60% from last year.
Under the direct-to-consumer division, paid subscribers of Disney+ increased to 116 million on July 3rd, 2021, from 57.50 million on June 27th, 2020 and surpassed the 115.20 million subscribers forecast by analysts surveyed by FactSet. ESPN+ paid subscribers were 14.90 million, up 75% from 8.50 million. Hulu (comprising SVOD Only and Live TV+SVOD) increased 21% to 42.80 million, from 35.50 million.
Overall, at the end of July 3rd, 2021, Disney+ subscribers stood at 173.70 million, a sharp rise from 101.50 million in the year-ago period. Furthermore, the average monthly revenue per paid subscriber of Disney+ fell to $4.16, from $4.62 due to a greater mix of Disney+ Hotstar subscribers in the latest quarter compared with the prior-year quarter, partly negated by a lower mix of bulk subscribers and rise in retail pricing.
Free cash flow increased 16% y-o-y to $528 million in the third quarter of fiscal 2021.
The quarterly earnings beat and sharp rise in the Disney+ subscribers is expected to keep the stock range-bound with a slight bullish bias in the short term.
The historical price chart indicates that the stock is consolidating at 180 levels. The next minor resistance is anticipated only near 200. Additionally, the stock is trading above its 50-day moving average, while the Chaikin money flow indicator has a positive reading. Therefore, we are anticipating the stock to resume its uptrend in the short term.
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