10 February 2022
If you are covering the latest Walt Disney Company results, please see the following comment from Ben Barringer, equity research analyst at Quilter Cheviot:
“The Walt Disney Company last night shared better than expected results - though expectations had been low. Last quarter we were told to expect lower subscriber numbers and were warned costs would be rising on content and parks. While this was still true, Disney managed to do better than the market expected, and revenues were up 34% - 4% ahead of expectations.
“Disney+ subscribers increased by 12 million in the quarter, considerably higher than the consensus of 7 million. Total subscribers now sit at 129 million. While growing, Disney plus remains a long way off of rival Netflix. Additionally, Disney saw growth in its newer services, ESPN+ and Hulu. Importantly, guidance has remained the same and Disney+ subscribers are expected to increase from 129 million to 230-260 million by 2024.
“This growth has been primarily sustained by new markets, including Latin America, Asia and Europe, as well as by driving content. India is also a big growth market for Disney and could be helped if they are successful in renewing the Indian Premier League auction rights.
“Parks have seen revenues double since full reopening, with strong attendance and increased per capita spending. It is well worth noting that revenues from international visitors are yet to return. Such attendees typically stay longer and spend more, and in pre-Covid conditions represented 20% of park visitors.
“Spending on content is set to increase to $33 billion, with a third being spent on sports rights. With $22 billion left to spend, this will likely help to bump up subscriber numbers and further growth.”
