Disney (DIS) Q3 Earnings Analysis
Disney shares are rocketing higher after the company’s third quarter earnings topped analyst expectations. The biggest highlight of their earnings was their Disney+ subscriber growth, which came in at 112.6 million, above the 109 million expected. Disney’s struggle since the pandemic was largely become of their losses on Disney+, so subscriber growth in the weakest link is a great sign. The company is also still very focused on cost-reduction, aiming to bring annualized costs down by another $7.5B, which gives hope to investors that they will start dividend distributions once again in the near future. Disney’s interim CFO stated that management will recommend bringing back the dividend before the end of the year, massive news for the company and likely the biggest driver of the post-earnings rally.
Disney’s risk taking to buy a piece of Hulu and start Disney+ costed their stock a lot of market value in the last three years, but management was optimistic during this earnings that their investments will start paying off in the next 12 months. Their ad-tier subscription to Disney+ is gaining traction, which boosts revenue, and their decision to buy Comcast’s Hulu stake will set them up to compete with other internet based TV services. The company knew that relying strictly on their theme parks and ESPN couldn’t keep investors happy alone, they branched out and with the help of proper management, they’re making the best of their market position.