May 17, 2022


Skillful Business Crafters

Disney Earnings: What Happened with DIS

Disney Earnings Results
Metric Beat/Miss/Match Reported Value Analysts’ Prediction
Adjusted EPS Miss $0.37 $0.44
Revenue Miss $18.5B $18.8B
Parks, Experience and Products Revenue Beat $5.5B $5.4B

Source: Predictions based on analysts’ consensus from Visible Alpha

Disney (DIS) Financial Results: Analysis

The Walt Disney Company (DIS) reported on Nov. 10, 2021 that its Q4 FY 2021 earnings results missed analysts’ consensus estimates. Adjusted earnings per share (EPS) came in below analyst forecasts but were a significant improvement from the adjusted loss per share reported in the year-ago quarter. Disney’s revenue also missed expectations, rising 26.0% year over year (YOY). Revenue for the company’s Parks, Experience and Products segment, however, came in above expectations. The company’s shares fell as much as 5% in post-market trading. Over the past year, Disney’s shares have provided a total return of 22.6%, below the S&P 500’s total return of 31.1%.

DIS Parks, Experience and Products Revenue

Revenue for Disney’s Parks, Experiences and Products segment rose 99.4% compared to the year-ago quarter, marking the second straight quarter of growth after five consecutive quarters of declines. The segment is comprised of Disney’s theme parks, resorts, cruise ships, and vacation clubs. It is tied especially closely to the spending power of consumers in the U.S. and around the world.

Of all Disney’s business segments, the Parks, Experiences and Products segment has been the most severely affected by the COVID-19 pandemic and related government-imposed measures to limit the spread of the virus. The company was forced to close its theme parks and resorts and suspend cruise ship sailings in response to these developments, only beginning to reopen again at generally reduced capacity in May 2020. All of Disney’s theme parks and resorts were open during Q4 FY 2021.

In FY 2019, the year before the pandemic, the segment accounted for 38.5% of the company’s annual revenue. In FY 2020, it accounted for just 26.1%. The segment’s share of revenue fell again in FY 2021, accounting for 24.6% of company-wide revenue.

DIS Disney+

One aspect of Disney’s business that benefitted during the pandemic was its direct-to-consumer (DTC) video streaming service Disney+, which is celebrating its two-year anniversary after it was launched in November 2019. The streaming service finished the fourth quarter and FY 2021 with a total of 118.1 million paid subscribers, up 60.2% YOY. Disney’s entire DTC services, including ESPN+ and Hulu, finished the fiscal year with 179 million total subscribers, up 48.4% YOY.

Disney Earnings Call Recap

On an earnings call after results were released, Chief Executive Officer Bob Chapek (CEO) indicated that Disney+ faced a bumpy road in reaching its goal of 260 million customers by 2024. He said that subscriber growth at Disney+ won’t begin to speed up again until the third and fourth quarters of the current fiscal year. “We identified the need for the content way back exactly a year ago and have prepared a very strong cadence of content, which will now hit the pipeline in the second half of this year,” Chapek said.

Disney’s next earnings report (for Q1 FY 2022) is estimated to be released on Feb. 9, 2022.