Disney’s stock plummeted by 10% in after-hours trading on Tuesday after the company reported its fiscal fourth-quarter earnings. The company experienced lower-than-expected results, which are primarily pinned on macroeconomic challenges such as the global advertising slowdown as well as the company’s streaming losses.
The company’s revenue of $20.15 billion fell below analysts’ estimates of $21.26 billion, with adjusted earnings per share coming to $0.30, compared to a predicted $0.51. On the flip side, Disney+ added 12.1 million new subscribers in the quarter, higher than experts’ estimates of 9.35 million.
Revenue for the company’s parks, experience, and consumer products businesses came to a combined $7.43 billion, falling short of an expected $$7.59 billion.
Although Disney+, Hulu, and ESPN+ lost a combined $1.5 billion in the fourth quarter, Disney CFO Christine McCarthy expects a turnaround whereby streaming losses will shrink by bout $200 million in the first quarter of 2023.
“We expect our DTC operating losses to narrow going forward and that Disney+ will still achieve profitability in fiscal 2024, assuming we do not see a meaningful shift in the economic climate,” Disney CEO Bob Chapek stated, thereby agreeing with McCarthy’s statement.
