Disney: Some Magic Left In The Kingdom
A commentary on Disney’s quarterly update from Freetrade’s Paul Allison.
Disney’s Stock Drops
Walt Disney Co (NYSE:DIS)’s stock drop after hours shows just how much sentiment matters in the short-term.
After Netflix Inc (NASDAQ:NFLX)’s recent horror shows the market was laser focused on streaming subscriber numbers.
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Q1 2022 hedge fund letters, conferences and more
So when Disney reported that subscribers of its streaming service grew by nearly 8m (compared to a loss at Netflix), we might have expected a big sigh of relief.
Instead, the curmudgeonly market chose to pick at the commentary from the conference call where CFO Christine McCarthy said “Disney+ net subscriber growth might not be as strong in the second half as they had originally expected”
And that was that. Disney stock reversed its initial pop to move down 4% after hours.
In better times, the news that subscriber numbers beat expectations and that Disney's domestic parks business is doing strongly, more than doubling revenues over the same period last year, would probably have been greeted with a cheer.
But when the market isn't in the mood, good news can fall on deaf ears.
Disney did point to its Asian park business as still feeling some COVID challenges, but that shouldn't surprise anyone.
Overall, it looks like there is still some magic left in the Disney kingdom. The shares are 40% lower than last year but the business is doing well.
Maybe Disney shareholders just need a perkier market to view the firm's performance in a better light. But it's difficult to predict exactly when that’ll happen.
Updated on May 12, 2022, 12:19 pm
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