Disney Q3 FY 2022 Earnings Report Recap

DIS beat on earnings and on revenue

By

Published August 10, 2022

Key Takeaways

The number of Disney+ subscribers came in about 4.6 million above estimates.
Disney+ is Disney's video streaming service and has grown rapidly since it first launched in late 2019, but the pace of growth has slowed dramatically.
Revenue also beat analyst predictions.

Disney Earnings Results
Metric	Beat/Miss/Matched	Reported Value	Analysts' Prediction
Adjusted EPS	Beat	$1.09	$0.95
Revenue	Beat	$21.5B	$20.9B
Disney+ Subscribers	Beat	152.1M	147.5M

^{Source: Predictions based on analysts' consensus from Visible Alpha}

Disney (DIS) Financial Results: Analysis

Walt Disney Co. (DIS) reported Q3 FY 2022 earnings results that solidly beat analysts' consensus estimates. Adjusted earnings per share (EPS) excluding certain items came in above analyst forecasts, climbing by 36.3% year-over-year (YOY). Disney's revenue also surpassed expectations, rising by 26.3% YOY. Disney Chief Executive Officer (CEO) Bob Chapek said that strong performance at its domestic theme parks as well as increases in live-sports viewership and streaming-services subscriptions fueled growth. Disney+ subscribers also beat analyst predictions for the quarter.

Disney+ Subscribers

Disney's total Disney+ subscribers reached 152.1 million for the quarter, growing by 31.1% YOY. While this figure beat analysts' predictions, it was nonetheless the slowest pace of growth in this key area in at least seven quarters. The streaming service offers Pixar, Marvel, Star Wars, and National Geographic-branded content in the U.S. and a number of other countries throughout the world. Disney+ still comprises just a small share of Disney's total revenue but has grown rapidly in the short time it has been available. That rapid growth has given investors something to be optimistic about during the COVID-19 pandemic, which shut some of Disney's core businesses, including its theme parks, cruises, and theatrical productions. However, growth in subscriptions for Disney+ has been gradually slowing amid intense competition from other streaming services, such as those offered by Netflix, Inc. (NFLX), Amazon.com, Inc. (AMZN), and Apple Inc. (AAPL).

Disney Outlook and Stock Performance

Disney did not provide forward guidance in its earnings letter.

Disney shares climbed by about 5.8% in extended-hours trading after the company posted its earnings release. Still, shares have significantly trailed the broader market in the past year. Disney stock has provided a 1-year trailing total return of -36.5% compared with -5.1% for the S&P 500 as of Aug. 10, 2022.

Disney's next earnings report (for Q4 FY 2022) is expected to be released on Nov. 10, 2022. The company's last fiscal year ended on Oct. 2, 2021.

Article Sources

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Walt Disney Co. "THE WALT DISNEY COMPANY REPORTS THIRD QUARTER and NINE MONTHS EARNINGS FOR FISCAL 2022," Pages 1, 6.
Visible Alpha. "Financial Data."
Walt Disney Co. "Form 10-K for the Fiscal Year Ended Oct. 2, 2021," Page 9.
TradingView. "Price Chart: DIS and S&P 500."
MarketScreener. "WALT DISNEY COMPANY (THE) (DIS)."
Walt Disney Co. "THE WALT DISNEY COMPANY REPORTS FOURTH QUARTER AND FULL YEAR EARNINGS FOR FISCAL 2021."

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