Disney’s best earnings estimates for Q3 as Disney + subscribers grow more than expected

Disney (DIS) on Thursday released third-quarter tax results that were better than Wall Street estimates, as user growth on the company’s main streaming platform exceeded expectations. Shares rose more than 2% in the wake of the results.

Here are the key metrics included in Disney’s report against consensus data compiled by Bloomberg:

For investors, the company’s nearly two-year streaming business, Disney +, is crucial, and it was to be in the spotlight when the results were released and Disney called. During the pandemic, the growth of Disney’s streaming platform Disney + has helped appease investors as the company’s lucrative parks and resorts saw their business dry up.

The total number of Disney + subscribers rose to 116.0 million, far exceeding estimates for a total of 113.1 million. The result was a welcome impression for investors, given that in May, Disney + recorded its weakest quarter for user growth since its debut, with an increase of 8.7 million new subscribers. Still, the streaming platform has grown significantly since its launch in late 2019, with subscribers surpassing the 100 million mark in less than two years.

“We ended the third quarter in a strong position and are pleased with the company’s trajectory as we grow our business amid the current challenges of the pandemic,” Disney CEO Bob Chapek said in a statement. Press. “We continue to introduce exciting new experiences to our parks and resorts around the world, as well as new customer-centric services, and our direct-to-consumer business is doing very well, with a total of nearly 174 million dollars. subscriptions on Disney +, ESPN + and Hulu. at the end of the quarter, and plenty of new content to come to the platforms.

The streaming slowdown wasn’t limited to Disney. Netflix, the historic leader in US-based internet streaming platforms, added just 1.5 million new members in the second quarter of this year. That fell sharply from the more than 10 million paid users added in the same quarter last year, when consumers turned in droves for entertainment at the height of hold-up orders.

Disney’s vast library of content on Disney + and its other streaming platforms has been key to its success to date. ESPN + increased subscribers 75% year-over-year in the third quarter to 14.9 million, with a stronger lineup of live sports helping to increase viewership.

In terms of movies, Marvel names such as “Loki” and “Black Widow” saw success both in theatrical releases and on Disney +, providing another major benefit to Disney’s business during the quarter. .

Overall, Disney returned to revenue growth for the first time in five quarters, driven by both streaming and its park recovery business. Visits to the company’s global parks and complexes have increased as vaccinations and consumer mobility increase. By the end of the third quarter, all of Disney’s global theme parks had reopened, including Disneyland Paris and Disneyland in California, which had been closed again earlier this year.

“We knew at the start of this quarter that pent-up demand was there. The restrictions were easing. I think this quarter highlighted the potentially large increase as attendance continues to improve and nears the pre-season peak. pandemic “, Tuna Amobi, CFRA Research analyst, Yahoo Finance told Yahoo on Thursday. “As streaming grows its revenue, it’s going to take a very, very long time, frankly, if at all, for this business… to come close to what we see with theme parks today. ”

Although foot traffic in the parks was lower than pre-pandemic levels, the re-openings have allowed Disney’s overall profit engine to resume operations more vigorously. Disney’s Parks, Experiences and Consumer Products business segment returned to operating income of $ 356 million in the quarter ending July 3, after recording a loss of approximately $ 1. $ 9 billion over the same three month period last year.

However, the costs of addressing the health issues related to the pandemic are still expected to be high for Disney. Disney reiterated its forecast from last quarter, saying it planned to spend around $ 1 billion on employee, talent and guest safety measures in fiscal 2021.

Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter: @emily_mcck

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