Disney stock rallied thanks to higher park profits
Disney shares rose in value, according to the published financial report. The media giant’s earnings rose to $1.09 per share last quarter, compared with analysts’ forecast of $0.97 per share. The corporation’s product revenues rose to $21.5 billion. Wall Street analysts had estimated the figure at nearly $21 billion. The increase in revenues was due to attendance at Disney parks, which recorded an increase in ticket sales. The amusement parks brought in $7.4 billion for the business, up 72% from the previous quarter.
Experts also cite an increase in revenue from the Disney+ streaming service as a factor in the appreciation. Here there is an increase in the number of subscribers and profits, the volume of which exceeded analysts’ forecasts. The previous quarter recorded 152.1 million Disney+ subscribers against a forecast of nearly 148 million. ESPN+ has a total of nearly 23 million subscribers and Hulu has just over 46 million. However, according to Disney officials, the streaming service as a whole remains unprofitable so far, which is completely under the company’s control. It will start making a profit in 2024.
In addition to the reporting information, the corporation also announced an increase in the cost of subscriptions to Disney+, and there will be another option of subscription with a low price at the expense of broadcast advertising. In addition, the media giant lowered its forecast on the number of subscribers to 2024. Their number is expected to be 215-245 million, 15 million fewer than the forecast, which was published at the end of 2020.
The corporation also presented an updated pricing structure for products and services. For example, new rates will be introduced to increase the profitability of the streaming service. Starting in December, a Disney+ subscription in the U.S. will cost $7.99 per month and will include streaming ads. A subscription without commercials will go up 38% to reach the $11 mark. Watching Hulu streaming without ads will be $15 a month and will go up by $2. Here the price increase will occur starting this month. The service’s tariff with advertising inserts is $8 a month. There will be no change in the subscription for ESPN+ in both streaming services – $20 a month.
It should be noted that since the beginning of the year, the stock price of the media corporation has been falling, with an average of 27% down. This was influenced by a number of events, including the postponement of movies, the premieres of which were announced earlier.