Disney beats analysts’ quarterly estimate for streaming sign-ups

Walt Disney Co.’s online TV business continued to surprise investors, with the flagship Disney+ streaming service reaching 116 million subscribers in the fiscal third quarter and beating the 113.1 million that analysts expected. Disney+ added 12.4 million subscribers in the period ended July 3, the entertainment giant said Thursday. With its theme parks back open, earnings rose to 80 cents a share, excluding some items, compared with the 55-cent average of analysts’ estimates. Revenue also soared, reflecting the return of tourists after the Covid-related shutdown, beating estimates of $16.8 billion. The direct-to-consumer division, home to the streaming business, narrowed its loss in the period as sign-ups and revenue grew. Last month, Netflix Inc. reported a drop in North American subscribers and issued a disappointing forecast for the current quarter, raising investor concerns. The world’s largest entertainment company is rebounding from the pandemic, which shuttered its theme parks around the world, idled cruised ships and crimped attendance at movie theaters for much of the past year. The big increase in revenue reflects the reopening of Disney’s parks. The delta variant of COVID-19 is threatening that. Southwest Airlines Co. this week reduced its forecast for revenue for the current quarter because the recent surge in cases has cut domestic travel demand and led to trip cancellations. It’s the biggest airline serving Orlando, Florida, the biggest market for Disney resorts. Theme-park profit totaled $356 million, while revenue rose fourfold to $4.34 billion. The company’s TV division reported lower profit, with costs for returning sports programs weighing on results. Revenue rebounded, thanks to increases in advertising and higher fees from pay-TV providers for channels such as ABC and ESPN. Disney shares rose as much as 5% to $188.20 in after-market trading. The stock has lost 1% this year through the close Thursday in New York, compared with a 19% gain for the S&P 500. —Bloomberg News

Disney beats analysts’ quarterly estimate for streaming sign-ups

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