Disney (DIS) reported fiscal third-quarter results Thursday that beat Wall Street's estimates, with user growth at the company's key streaming platform coming in ahead of expectations. Shares rose by more than 2% following the results.
Here were the main metrics included in Disney's report compared to consensus data compiled by Bloomberg:
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Revenue: $17.02 billion vs. $16.80 billion expected and $11.78 billion Y/Y
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Adjusted earnings per share: 80 cents vs. 55 cents expected and 8 cents Y/Y
For investors, the company's nearly two-year-old streaming business Disney+ is crucial, and it was set to be under the spotlight during Disney's earnings release and call. Over the course of the pandemic, growth at Disney's streaming platform Disney+ helped placate investors as the company's lucrative parks and resorts saw business dry up.
Total subscribers at Disney+ grew to 116.0 million, handily exceeding estimates for a total of 113.1 million. The result was a welcome print for investors, given that in May, Disney+ posted its weakest quarter for user growth since its debut, with new subscribers rising by 8.7 million. Still, the streaming platform has grown notably since launching in late 2019, with subscribers breaking above the 100 million mark in fewer than two years.
“We ended the third quarter in a strong position, and are pleased with the company’s trajectory as we grow our businesses amidst the ongoing challenges of the pandemic,” Disney CEO Bob Chapek said in a press statement. “We continue to introduce exciting new experiences at our parks and resorts worldwide, along with new guest-centric services, and our direct-to-consumer business is performing very well, with a total of nearly 174 million subscriptions across Disney+, ESPN+ and Hulu at the end of the quarter, and a host of new content coming to the platforms.”
The slowdown in streaming had not been limited to Disney. Netflix, the incumbent leader among U.S.-based internet streaming platforms, added just 1.5 million new members in the second quarter of this year. That fell sharply from the more than 10 million paid users added in the same quarter last year, when consumers turned in droves to find entertainment during the height of stay-in-place orders.
Disney's broad library of content on Disney+ and its other streaming platforms has been the key to its success to date. ESPN+ grew subscribers by 75% year-over-year in the third quarter to 14.9 million, with a stronger lineup of live sports helping boost viewership.
In terms of films, Marvel names including "Loki" and "Black Widow" saw success both in theatrical releases and on Disney+, offering another major positive for Disney's business during the quarter.