🏰 Are Disney’s Results Sustainable With Delta Gaining Ground?
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🏰 Disney: At The Mercy Of The Greek Alphabet?
The Walt Disney Company (DIS) reported Q3 results that beat analyst expectations on all fronts. The bigger takeaway was the return of the company's pandemic-battered Parks, Experiences and Products segment to profitability. With the US currently in the throes of yet another wave of rising infections, will the trend sustain at Disney?
The Return Of The Crowds
Disney had eased restrictions since April on the back of improving the Covid situation and opened up its theme parks. The result of that decision was clearly visible in Q3.
Key Stats for Q3:
Revenue: $17.02B Vs $16.76B expected - Highest in six quarters
Earnings Per Share: $0.80 Vs $0.55 expected
Disney+ Subscribers: 116M Vs 114.5M expected and 103.6M in Q2
Disney+ continued to rack up subscribers, but the average monthly revenue per subscriber fell 10% Y-o-Y to $4.16. This is because of the lower price points for customers in Indonesia and India which ends up dragging the global average monthly revenue down.
Be that as it may, Disney has overshot its own expectations in terms of acquiring subscribers. Between Disney+, ESPN+, and Hulu, it now boasts 174M subscribers and is within earshot of Netflix.
The Delta Threat
In the wake of the Covid wave, Disney now requires all guests, regardless of their vaccination status, to wear masks in indoor locations at Walt Disney World Resort in Florida and the Disneyland Resort in California.
Delta has certainly played spoilsport in Disney’s party. Shareholders too remain sceptical despite the strong results and would definitely want to see more consistency on the ground. Shares of Disney are currently at the same level at which they were at the start of the year. Disney has definitely delivered this quarter, but the future seems quite dependent on Greek alphabet such as Delta and Lambda.
Market Reaction
DIS ended at $181.08, up 1.00%.
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