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Disney revenue slumps, but profit tops forecast

by MAE ANDERSON THE ASSOCIATED PRESS | May 14, 2021 at 1:52 a.m.
A Disney logo forms part of a menu for the Disney Plus movie and entertainment streaming service on a computer screen in Walpole, Mass., in this Nov. 13, 2019, file photo. (AP/Steven Senne)

NEW YORK -- Disney second-quarter revenue dropped as the pandemic continued to weigh on its parks and theme parks. Disney Plus subscriptions continued to surge but missed some analyst expectations. Still, net income beat expectations and Chief Executive Officer Bob Chapek said signs of recovery can be seen across the company's business as the pandemic begins to wane.

Disney Plus subscribers more than doubled from a year ago to 103.6 million as of April 3. That was lower than the 109.3 million analyst expected, according to FactSet. Chapek said the company is still on track to reach its goal of 230 to 260 million subscribers for Disney Plus by 2024.

Chief Financial Officer Christine McCarthy said in a call with analysts that growth in subscriber sign-ups was slower during the first two months of the year because of the lack of major product launches and a price increase in the Africa, Middle East and Asia region. But she said sign-ups grew more quickly in March.

Shares dropped 4% to $171.10 in aftermarket trading Thursday.

Net income attributable to Disney for the three months that ended April 3 totaled $901 million, or 49 cents per share. Excluding one-time items, net income totaled 79 cents per share. One-time costs were related to closing an animation studio and some Disney-branded retail stores, as well as severance at some parks and resorts. That beat analyst expectations of 26 cents per share, according to FactSet.

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Revenue dropped 13 percent to $15.61 billion, from $18.03 billion last year. That was short of analyst expectations of $15.86 billion.

The vast library of Disney Plus, including Disney movies and TV shows plus hit original series like Marvel's "WandaVision" and the Star Wars spinoff "The Mandalorian," have helped drive sign-ups. People stuck at home during the pandemic over the past year also boosted subscriptions, but that could begin to ease as things open up again.

Revenue per Disney Plus customer dropped 29% to $3.99. That's because the figures include Disney's offering in India, where customers pay less than in other parts of the world.

Revenue from parks dropped 44 percent to $3.17 billion. But parks are beginning to show signs of life after being shuttered during most of the pandemic.

Movie theaters shuttered during the pandemic have also begun to reopen since late March. Disney plans to release "Cruella," a live-action movie about the villain in "101 Dalmations," starring Emma Stone, in theaters on May 28. It will release Marvel's "Black Widow" in July.


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