Disney Earnings Exceed Expectations as Parks Reopen

Theme parks are back, and that’s good news for Disney, which on Thursday reported better-than-expected earnings and a return to revenue growth for the first time in five quarters. The company brought in $17 billion in sales, up 45% from the same period last year. That’s a bit higher than Wall Streets’ expectation of $16.8 billion, and the news sent shares up 4% in after-hours trading. The company reported earnings of $995 million in the third quarter, a significant improvement from the $4.8 billion loss posted this time last year. This was the first quarter that all of Disney’s (DIS) global theme parks have been open since the start of the pandemic, allowing the company to resume some semblance of normalcy. The parks, experience, and products division brought in $4.3 billion in the third quarter, up from $1.1 billion in the same quarter last year. Disney+, which carried the company through the pandemic as parks remained closed and operated at limited capacities, grew to 116 million subscribers in the most recent quarter, exceeding the 112 million subscribers Wall Street analysts expected.

At the end of May, the company reported slower subscriber growth than expected, mostly because of increased vaccination rates and relaxed Covid regulations that got people out of the house again.

Since then, the platform released “Black Widow” and “Jungle Cruise” through its Premier Access Function, which gives subscribers the opportunity to watch movies on Disney+ the day they’re released in theaters for an additional charge of $29.99. The movies brought in $60 million and $30 million respectively via Disney+ alone. The company is currently grappling with a lawsuit from Scarlett Johansson, who starred in “Black Widow.” In the lawsuit, Johansson alleges that Disney breached her contract by simultaneously releasing the film on Disney+ and in theaters. As Delta variant cases continue to surge, especially in Florida, it’s unclear how the company’s theme parks will be affected. Disneyland Paris in July began requiring guests to present proof of vaccination, a negative PCR test result, or a positive antigen test proving they have already been infected with Covid before they can enter the park. The company remains “bullish” about its parks’ recoveries and continues to see “really strong demand for our parks,” Bob Chapek, Disney’s CEO, said on a post-earnings call with investors and analysts Thursday. Disney has implemented a reservation system at its parks to manage capacities and improve guest experiences. Reservations have now surpassed third-quarter attendance levels, Chapek said. The company anticipates all of its parks will be fully staffed again by the end of 2021.

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