9 November 2022
If you are covering Disney’s latest results please find below a comment from Ben Barringer, equity research analyst at Quilter Cheviot:
“Disney’s results last night disappointed investors as lower revenues than expected and higher costs led to a 30% miss in profits. The results were also not helped by linear advertising declines.
“The parks continue to recover with revenues up 36% as all US parks are now open and international travel is back to pre-pandemic levels. However, Hurricane Ian impacted attendance in Florida and Disney Shanghai remains closed.
“Disney+ added 9m subscribers vs 6m last quarter, taking the total to 100 million. We await the launch of the advertising supported version of Disney+ on the 8th of December and this will be accompanied by a price increase on the non-advertising version from $8 to $11. These two revenue drivers plus lower marketing spend and a more optimised content slate will allow Disney to bring Disney+ to profitability in 2024.
“Guidance for 2023 of high single digit revenue and profit growth, is below expectations but may include some conservatism given the macroeconomic environment and possible churn of subscribers to Disney+ caused by the price rises. However, overall Disney remains a high quality set of assets but not completely immune to macro pressure.”
