Mark Zgutowicz from Rosenblatt Securities and CNBC's Alex Sherman join Closing Bell to discuss Disney's earnings and whether the company has reached peak growth. For access to live and exclusive video from CNBC subscribe to CNBC PRO:
cnb.cx/2NGeIvi Disney reported blowout fiscal third-quarter earnings after the bell Thursday, beating Wall Street expectations on subscriber growth, revenue and earnings.
The company’s shares were up more than 5%.
Earnings per share: 80 cents vs 55 cents expected in a Refinitiv survey of analysts
Revenue: $17.02 billion vs $16.76 billion expected in the survey
The company beat on subscriber estimates for Disney+, coming in at 116 million. StreetAccount estimated the company to report 114.5 million subscribers for its third quarter. The segment had 103.6 million in its fiscal second quarter.
Average monthly revenue per subscriber for Disney+ dipped 10% year over year to $4.16. The company attributed the drop to a higher mix of Disney+ Hotstar subscribers compared with the prior-year quarter.
Disney’s average revenue per user has shrunk in recent quarters because of the lower price points for its Disney+ and Hotstar bundle in Indonesia and India. The service has lower average monthly revenue per paid subscriber than traditional Disney+ in other markets, pulling down the overall average for the quarter.
Disney is also continuing to experiment with viewership habits and how it releases films following the coronavirus pandemic. The company will release “Shang-Chi” in theaters exclusively for 45 days before adding it to its streaming service.
“The prospect of being able to take a Marvel title to the service after going theatrical with 45 days will be yet another data point to inform our actions going forward on our titles,” CEO Bob Chapek said during Thursday’s earnings call.
Overall, the company said it had nearly 174 million subscriptions across Disney+, ESPN+ and Hulu at the end of its third quarter. Revenue for its direct-to-consumer segments increased 57% to $4.3 billion. Average monthly revenue per paid subscriber grew slightly for ESPN+ and Hulu.
Disney said the company’s total addressable market is 1.1 billion households across the globe.
“We’ve only just begun our journey and as I think you see what’s really going to make the difference for Disney is our spectacular content, told by the best storytellers, against our powerhouse franchises,” Chapek said.
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