Disney Stocks tumble after not hitting expectation marks; what we need to know

CENTRAL, Hong Kong - Feb. 24, 2022 - PRLog -- Disney's sales came in at $18.53 billion, compared to $18.79 billion predicted by analysts. During the same time period, the company's adjusted earnings per share (EPS) were 37 cents, compared to 51 cents expected by analysts. During after-hours trading on Wednesday, Nov. 10, shares of the entertainment conglomerate plummeted 4%. After trading began on November 11, 2021, investor's response was much more apparent. The stock is presently trading at $160.95, down 7.74 % from the opening bell.

The majority of Disney's stock gains, both during and after the pandemic shutdown have come from its streaming segment, Disney Plus. Investors have used the streaming service's membership figures as a proxy for the House of Mouse's future growth possibilities due to limits on outside eating and entertainment. Bob Chapek, the CEO of Disney had some unpleasant news for them.

Only 2.1 million new customers were added to the program, compared to analyst projections of 9 million new users. Because of the modest increase, the total number of Disney Plus subscribers has now reached 118.1 million, a far cry from the 125 million experts expected the firm to reach. The streaming services average monthly income per user declined by 9% to $4.12 in comparison to the previous year.

The long-term objective for Disney Plus, according to the business, is to attain between 230 and 260 million customers by September 2024. In the coming year, according to Chapek, the business wants to quadruple the number of countries where Disney Plus is available to 120. "I want to emphasize that we are committed to managing our direct-to-consumer business for the long term, not quarter by quarter and we are confident that we are on track to meet the forecast we issued at last year's investors day," added the CEO.

Despite this, Disney is "well-positioned for the rebound," according to Bank of America analyst Jessica Reif Ehrlich, "led by a continuous growth in capacity at theme parks and an increasing content slate."

CEO Chapek stressed the sectors big picture story for the coming year, stating that Disney expects "strong demand" for the parks segment in the coming year. "Not only abroad, but notably locally," he added, alluding to the company's new applications and technological advances to help manage operations at congested parks.

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