Disney took a big hit and it doesn’t look pretty. Missing on both the top and bottom lines, Disney (DIS) reported fiscal fourth-quarter earnings after the bell. As the company battled higher-than-expected streaming losses, macroeconomic challenges, including the global advertising slowdown, weighed on earnings.

With losses accelerating as investors digested the results – down as much as 10% in after-hours trading, Disney stock moved lower on the heels of the report. Compared to Wall Street’s consensus estimates, here are Disney’s fourth-quarter results, as compiled by Bloomberg and syndicated by Yahoo News:

– Revenue: $20.15 billion vs. $21.26 billion expected

– Adj. earnings per share (EPS): $0.30 vs. $0.51 expected

– Disney+ subscriber net additions: 12.1 million vs. 9.35 million expected

– Parks, experience and consumer products revenue: $7.43 billion vs. $7.59 billion expected

Beating expectations of just over 9 million, Disney+ saw subscriber net additions rise to 12 million. The beat comes after the company, following new market launches and a robust slate of content, reported a surge of subscribers in the third quarter (14.4 million). It was warned by the company that it expects core Disney+ subscriber growth, along with Hotstar subscriber numbers, to be lower in the first quarter.

For the full year of 2023, content spend was guided in the low $30 billion. In the fourth quarter (vs. a loss of 1.1 billion in the third quarter), Disney+, Hulu, and ESPN+ lost a combined $1.5 billion. Christine McCarthy, the CFO of Disney, expects peak Disney+ losses by this year, as she says, with management guiding that streaming losses will shrink by about $200 million in the first quarter of 2023.

In the earnings release, Disney CEO Bob Chapek said: “We expect our DTC operating losses to narrow going forward and that Disney+ will still achieve profitability in fiscal 2024, assuming we do not see a meaningful shift in the economic climate.”

“By realigning our costs and realizing the benefits of price increases and our Disney+ ad-supported tier coming December 8, we believe we will be on the path to achieve a profitable streaming business that will drive continued growth and generate shareholder value long into the future,” he said.

The average revenue per user for Disney+ dropped to $3.91, despite recent price hikes, vs. estimates of $4.29 amid adverse foreign exchange impact and a larger subscriber mix.

In December, one month after Netflix’s much-anticipated debut, the company will roll out its $7.99 ad-supported tier. Analysts remain bullish on the profitability prospects of ad-supported plans – especially for streaming companies – despite the overall slowdown in ad spend.

Expectations in the quarter were also missed by Disney’s theme parks. The parks saw quick COVID bounce-backs amid increased attractions, price hikes, and updated technologies like the Genie+ app, but as recession fears pressured consumer demand, they also missed expectations. With operating income hitting $1.51 billion (vs. estimates of $1.9 billion), Revenue from the company’s parks, experiences, and consumer products division came in at $7.43 billion.

Amid strict pandemic protocols in China, Shanghai’s Disney Resort remains closed, and the company revealed it has “no visibility on reopening date” for the Shanghai location.  But the media giant anticipates a “strong” holiday season at the parks in the first quarter of 2023, said McCarthy. The company touted its upcoming film slate on the earnings call, revealing that it sees “Avatar: The Way of Water” and “Black Panther: Wakanda Forever” driving movie sales.

McCarthy also revealed that she expects linear tv subscriber declines to accelerate, in-line with current industry trends.

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