Why did Disney Stock Drop | IFCM
IFC Markets Online CFD Broker

Why did Disney Stock Drop

Why did Disney Stock Drop

Walt Disney Company (DIS) shares fell sharply on Tuesday after releasing mixed second-quarter earnings. The stock price dropped around 8% despite the company beating earnings estimates thanks to significant cost reductions.

Disney Mixed Earnings Report

Disney pleased investors with its bottom line.

  • Adjusted earnings per share (EPS) came in at $1.21, exceeding analyst expectations of $1.10 and reflecting a 30% year-over-year increase.

This improvement stemmed from the company's aggressive cost-cutting measures.

However, revenue fell short of projections.

  • Disney generated $22.08 billion in revenue, missing analyst estimates of $22.12 billion. This also represented a slight decline from the previous quarter's $23.5 billion.

Disney Streaming Drives Profits

Disney's Experiences division, which includes theme parks, continued to perform well. Revenue in this segment jumped 10% year-over-year to $8.4 billion. The sports division also showed strength with a 2% revenue increase.

Disney's streaming services were another bright spot.

Direct-to-consumer streaming revenue grew 13% year-over-year, and the segment achieved profitability for the first time, reporting a $47 million profit compared to significant losses in prior quarters.

Disney+ subscriber numbers reached 153.6 million, slightly below analyst expectations but still reflecting a 3% increase from the previous quarter. Hulu subscribers also climbed by 1%.

Disney’s Entertainment Division Disappoints

The company's Entertainment division, movies, television, and streaming properties, was the source of investor disappointment.

  • Revenue in this segment declined 5% year-over-year and 2% from the previous quarter, falling to $9.8 billion. Movie revenue plunged 40%, and linear networks saw an 8% decline.
  • Disney+ subscriber growth also missed expectations.

Profitability on Track Despite Sell-Off

Despite the stock sell-off, Disney remains confident about its future profitability. The company expects to achieve profitability in its entire streaming business by the fourth quarter and projects $7.5 billion in annual cost savings for 2024.

Investor Reaction and Outlook

The stock price decline might be an overreaction considering the positive streaming performance and cost-cutting. However, Disney's recent stock surge might have led to an overvaluation with a high P/E ratio. While Disney's future growth potential remains strong, the current valuation might be a concern for some investors.

세부
Publish date
08/05/24
Reading Time
-- min

거래를 시도하십시오

0
레버리지 1:20
MARGIN_TRADE 1000
CALCULATION_BASE
상태: 닫은 LIVE_TRADING
변화:
QUOTATION_IN USD
이전 폐쇄
시가

거래할 준비가 되셨나요?

instrument
조건이 너무 좋고,
당신은 당신의 거래를 믿지 못할 것입니다.
instrument
Close support
Call to Skype Call to messenger Call to telegram Call to WhatsApp Call Back