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Author: Alan LittleDate: 2021-05-17

Disney (DIS) -2.60% on fiscal Q2 earnings, paid subs miss

Disney (DIS) shares closed 2.60% lower in New York on Friday after the entertainment company fell short of the Wall Street consensus for both earnings and total paid subscriber numbers in fiscal Q2.

Late on Thursday, Disney posted $0.79 earnings per share for the three months to 3rd April, which was a 32% increase from a year ago and 53 cents ahead of expectations.

Group revenues underwhelmed slightly with the $15.61bn figure coming in short of the $15.86bn forecast.

CEO Bob Chapek said that there were “encouraging signs of recovery” in the latest quarter and that Disney was focused on “fueling long-term growth”.

While the Disney+ subscription service has flourished during the last 12 months, the global pandemic has hit Disney’s parks, experiences and productions division hard.

Many of its physical locations are still either operating at limited capacity or closed entirely despite the relative success of vaccine rollouts in the US.

It is no surprise, then, that Disney’s theme park segment saw a 44% dip in revenue to $3.17bn in fiscal Q1.

It has resulted in Disney+ taking on greater precedence for investors, though there are signs that the service’s incredible growth may now be slowing.

Disney said that it now has 103.6 million paid subscribers, a very healthy number, but around seven million short of the 110.3 million target pegged by analysts polled by Bloomberg.

However, CNBC’s Jim Cramer warned on Friday that it would be a “very big mistake” to focus purely on Disney+ because it remains a “very good company”.

Disney shares slumped into the red early on Friday and traded lower throughout the session before finishing down 2.60% at $173.70.

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