Disney (DIS) shares fell after the company reported its latest results. The company posted a jump in Disney+ subscribers, but warned that closures due to COVID-19 took a toll on its theme parks in Asia.
Disney+ subscriptions totaled 138 million, more than the 135 million analysts had forecast. The company also said average revenue per user (ARPU) was up 5% to $6.32. Disney+ has been in the spotlight after a disappointing quarter for Netflix. Both Disney and Netflix are now planning for ad-supported versions of their streaming services.
Disney’s theme park business continued a strong rebound after extended closures during the pandemic. Operating income at the parks totaled $3.7 billion, a 50% increase from a year ago. However, the company said closures at Asia theme parks due to COVID-19 lockdowns could reduce operating income by up to $350 million in the third quarter.
Disney stock has been among the worst performers in the Dow after the past year. Shares are down 32% this year and 40% lower over the past year.
"Shares of Disney are actually lower today than they were before the pandemic was officially declared in March of 2020 and the company closed its theme parks around the world. Investors have clearly decided that the future growth of one of the world's largest entertainment companies is in serious doubt, and shareholders may be looking to make big changes at the top of the Magic Kingdom," stated Caleb Silver, Investopedia's Editor-in-Chief.