advertisement
advertisement

Disney stock price takes a hit after Disney Plus subscribers grow more slowly than expected

Slowed growth is the new name of the game for top streaming services like Disney Plus and Netflix.

Disney stock price takes a hit after Disney Plus subscribers grow more slowly than expected
[Illustration: FC]
advertisement
advertisement
advertisement

The Walt Disney Company reported better-than-expected earnings per share on Thursday, but that didn’t stop its stock price from taking an after-hours nosedive.

advertisement

That’s because the entertainment giant reported slower-than-expected growth for its Disney Plus streaming service. The service now has 103.6 million paid subscribers, versus a consensus estimate of 109 million cited by CNBC.

Disney shares were down more than 4% in pre-market trading on Friday.

The hit underscores the extent to which Disney—a diverse conglomerate with theme parks, TV networks, movie studios, and a vast consumer products division—is now wholly reliant on one metric. “Nothing else seems to matter,” analysts MoffettNathanson said in a research note Friday. “Previous [key performance indicators] that would swing the stock in years past like ESPN-affiliate fees, domestic-park profitability or global box office are accidental details in a market that is laser focused on Disney’s direct-to-consumer pivot.”

advertisement
advertisement

With its disappointing numbers, Disney joins rival Netflix, which last month reported significantly slowed subscriber growth in the first quarter. The service added 4 million compared to an expected 6 million subscribers. Both companies are coming off a year in which people around the world were sheltering in place due to COVID-19 restrictions, but as those continue to lift, more people may decide to cut down on the number of streaming services they subscribe to.

Disney reported earnings per share of 79¢ for its second fiscal quarter, far higher than the 27¢ analysts were expecting. But revenue was slightly lower than projections: $15.61 billion versus $15.87 billion.

About the author

Christopher Zara is a senior staff news editor for Fast Company and obsessed with media, technology, business, culture, and theater. Before coming to FastCo News, he was a deputy editor at International Business Times, a theater critic for Newsweek, and managing editor of Show Business magazine

More