World Domination

Image source: MicroOne and Natykach Nataliia - Shutterstock

What's going on?

Disney reported a mixed set of results earlier this week, but the Mouse House hopes to set that right by taking over every corner of the globe.

What does this mean?

After Netflix’s embarrassing quarterly update last month, investors were worried that Disney+ would be in the same boat. No need: the streaming service added a better-than-expected 8 million subscribers last quarter, bringing its total to nearly 138 million (tweet this). Visitors weren’t deterred by higher ticket prices at its hotels and theme parks either, which helped its resorts segment more than double its revenue from the same time in 2021. That drove up overall revenue by 23%.

Disney was cautious looking forward, mind you: the company warned that streaming growth for the rest of the year may not be as high as it thought, and that lockdown-driven closures at its Asian parks could cut profit by as much as $350 million this quarter. Investors didn’t appreciate that: they sent its stock down 5%.

Why should I care?

Zooming in: Expansion doesn’t come cheap.
Disney said its streaming service is on track to meet its target of 260 million subscribers by 2024, and it’ll be launching in 42 new countries this summer to help it achieve that goal. But that probably won’t do its bottom line any favors. Consider India, where more than half of last quarter’s new subscribers live: customers there are paying an average of 76 cents a month – a far cry from Americans’ $6.32.

For markets: Disney > Netflix.
Disney’s stock is down over 40% in the last year, but things could be worse: Netflix is down almost 70% in the same period. That disparity could be because Disney boasts its resorts business on top of its streaming segment, which means it makes money from holidaymakers and homebodies alike. Analysts certainly think that’s a winning combination: they’re expecting Disney’s stock to rise an average of around 70% in the next 12 months.

Originally posted as part of the Finimize daily email.

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