Disney reported Q4 earnings today, marking a conclusion to another difficult year of recovery for the company.
Earnings per share: $1.06 adjusted (analysts expected $0.63)
Revenue: $21.82 billion, +34% YoY (analysts expected $20.91 billion)
Disney has two core businesses: Media and Entertainment Distribution (MED) and Disney Parks, Experiences, and Products (PEP). During the pandemic, Media & Entertainment — which includes Disney’s prized Disney+ streaming service — made up the majority of their pandemic-era revenue. Increasingly, the Parks division is returning to greatness.
The Media division grew 15% to $14.58 billion. In notable figures, Disney made the majority (52%) of its Media revenue on Linear Networks such as ABC and ESPN. However, that revenue stayed flat. The company’s Direct-to-Consumer division grew 34% to $4.6 billion. It was boosted in-part by “better than expected” subscription figures for Disney+.
The company observed 129.8 million subscribers. CEO Bob Chapek indicated on CNBC that he expected 230-260 million paid subscribers on Disney+ by 2024. However, D2C will probably be a money suck for Disney for several years as it expands its original, digital-first programming.
Meanwhile, the Parks division posted record revenue and income from its domestic operations in Q4. I guess people really missed the Magic Kingdom and Disneyland — and they’re willing to pony up for the Mouse.
Though the company’s cruise line remained suspended, the company made do by allowing more people into its parks. During the pandemic, Disney restricted the capacity of its parks. However, it mostly looks to be moving beyond that practice. Disney has also had to raise prices because of inflation — and they’ve made up the rest of their perceived shortcomings by adding “microtransaction-esque” products in the parks to help people skip lines.
Domestic and International parks revenue grew by more than 100% in the quarter, coming in at $4.8 billion and $861 million respectively.
All-in-all, Disney’s latest earnings report is a huge tell of confidence (at least financially) in Disney’s new-ish CEO Bob Chapek. Chapek took over for Bob Iger, who led Disney through a golden age and helped launch the company’s streaming service before retiring last year.
However, the higher prices at the Parks have aroused some disappointment from the Disney fanfare. So far, it has had little consequence. In fact, Disney is making more on its Parks now than they ever have before. But that disappointment has been directed at Chapek, the scapegoat of Disney Park fandom.
If the fanfare were invested in $DIS today, they probably wouldn’t be all that upset by these figures. $DIS jumped 7.4% in afterhours, and more than 11% on the day, to $158.24.