by Ray Keating
November 8, 2022
Today, the Walt Disney Company reported its full year and fourth quarter earnings (ending on October 1), and it was a mixed story.
First, for the fourth quarter, diluted earnings per share (EPS) for the quarter decreased to $0.30 from $0.37 in the prior year quarter, and that $0.30 compared to market expectations of $0.55.
Second, revenues for the quarter registered $20.15 billion. That was up by 9 percent compared to the same quarter last year, but also came up short versus market expectations for $21.24 billion.
Third, for the year, however, diluted EPS increased to $3.53 from $2.29 in the prior year.
Fourth, on the direct-to-consumer (DTC) front, Disney+ subscribers came in at 164.2 million, versus market expectations of 160.45 million, and compared to 118.1 last year. Hulu total subscribers registered 47.2 million versus 43.8 million last year. And ESPN+ subscribers came in at 24.3 million versus 17.1 million last year. Therefore, total Disney streaming subscribers registered 235.7 million at the close of fiscal year 2022, compared to 230.6 million at the end of the third quarter and 179 million last year.
Disney CEO Bob Chapek pointed out, “Our fourth quarter saw strong subscription growth with the addition of 14.6 million total subscriptions, including 12.1 million Disney+ subscribers.”
Regarding DTC profitability, Chapek reiterated, “We expect our DTC operating losses to narrow going forward and that Disney+ will still achieve profitability in fiscal 2024.” However, he added, “assuming we do not see a meaningful shift in the economic climate.”
Fifth, regarding the Parks, Experiences and Products segment, it was reported, “Disney Parks, Experiences and Products revenues for the quarter increased to $7.4 billion compared to $5.5 billion in the prior-year quarter. Segment operating income increased $0.9 billion to $1.5 billion compared to $0.6 billion in the prior-year quarter. Higher operating results for the quarter reflected increases at our domestic and international parks and experiences businesses and, to a lesser extent, our merchandise licensing business.” Chapek called this “record results at our Parks, Experiences and Products segment.”
The bottom line is that Disney beat expectations on DTC subscribers, and DTC losses are now expected to decline from this point forward, pointing to profitability in 2024 (again, if the economy cooperates). But the company came up short on fourth quarter earnings versus expectations.
At the time of this writing, Disney stock was off nearly 10 percent after market on November 8, and had hit a 52-week low.
Ray Keating is the editor, publisher and economist for DisneyBizJournal.com; and author of the Pastor Stephen Grant thrillers and mysteries, and the Alliance of Saint Michael novels; and assorted nonfiction books. Have Ray Keating speak your group, business, school, church, or organization. Email him at email@example.com.
The views expressed here are his own – after all, no one else should be held responsible for this stuff, right?
Ray Keating is the author of the Pastor Stephen Grant thrillers and mysteries. Just published is Persecution: A Pastor Stephen Grant Novel. Keating says, “I think Persecution might be the most action-packed of any of the Pastor Stephen Grant books so far.”
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