Disney (DIS) Q1 2021 earnings

Disney saw strong growth in paid streaming subscribers in its fiscal year 2021 first quarter earnings report after Bell Thursday and a first quarterly profit since early last year.

The stock rose by around 1.7% after hours.

Here are the key numbers:

  • Earnings per share: According to Refinitiv, 32 cents were adjusted compared to an expected loss of 41 cents
  • Revenue: $ 16.25 billion versus $ 15.9 billion expected according to Refinitiv

That’s how the rest of the report went for Disney.

Streaming

Disney announced that it has nearly 95 million paid subscribers to its Disney + streaming service as of the quarter ended Jan. 2. This will happen in the first quarter after Disney’s free trial ends for some subscribers who are also Verizon customers.

Christine McCarthy, Disney CFO, told analysts on the company’s earnings call that executives “are very pleased with the conversion numbers we’ve seen there from promotions to paid subscribers.”

However, the average monthly revenue per paid Disney + subscriber decreased 28% from $ 5.56 to $ 4.03 year over year. That’s because that number now includes subscribers to Disney + Hotstar, which launched in India and Indonesia last year. The service has lower average monthly revenue per paid subscriber than traditional Disney + in other markets, lowering the overall average for the quarter.

On Disney’s earnings call, McCarthy said that without Hotstar, the average revenue per paid Disney + subscriber for the quarter would have been $ 5.37.

Average monthly revenue per paid subscriber increased slightly for Disney’s other direct-to-consumer platforms, ESPN + and Hulu, with the latter growing 26% for those using the live TV service.

The company said it had more than 146 million paid subscribers to its streaming services as of the end of the first quarter.

Revenue for Disney’s direct customer business increased 73% to $ 3.5 billion from the prior year quarter. This growth helped offset losses in other segments hit by the pandemic.

Parks

Revenue in Disney’s Parks, Experiences and Products segment declined 53% to $ 3.58 billion as many of the theme parks were either closed or operated at reduced capacity and the cruise lines and guided tours ceased.

CEO Bob Chapek told analysts on the company’s earnings call that the outlook for revenue and parks reopening “is really determined by public vaccination rates.” Disneyland is hosting a vaccination center for Californians, and Chapek said the center has dispensed more than 100,000 doses to date.

Chapek anticipates any reopening or increase in visitor capacity by the end of the year will include masking and social distancing measures. But he said Dr. Anthony Fauci’s prediction Thursday that the vaccine would be available to anyone who wants one in April would be a game changer.

The company said the Covid-19 outbreak cost this division an operating loss of approximately $ 2.6 billion in the first quarter of fiscal year.

Content and licensing revenue declined 56% to $ 1.7 billion for the quarter as Disney had no new theatrical releases and limited home entertainment releases in October, November and December.

Last year in particular, the studio released “Frozen II” in theaters and brought “Toy Story 4”, “The Lion King” and “Aladdin” to the home video market.

Disney expects FY2021 investments to be the same as 2020, with the company investing more in the media and entertainment segment and less in the parking segment.

Disclosure: NBCUniversal is the parent company of Universal Studios and CNBC.

Correction: In an earlier version of this story, remarks by Christine McCarthy, the company’s chief financial officer, regarding Disney’s plans to disclose future Disney + subscription numbers were misrepresented. In fact, the company plans to provide updates to subscriber numbers at the end of each quarter. Additional updates to attendee numbers may not be provided at the time of winning calls.

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