Why Did Walt Disney Shares Fall?
3 minutes for reading
Today I'm telling you about the report on Q2, financial 2021 of Walt Disney, one of the world's largest media conglomerates in the sphere of entertainment. Mind how the shares reacted. Let's get started.
Walt Disney report for Q2
On May 13th, Walt Disney transnational media corporation published its report for January-March. Analysts got especially agitated about such an index as an increase in the number of paid subscribers on the Disney+ streaming platform.
Though this number grew by 8.7 million users, reaching 103.6 million people, the statistics disappointed the experts. In Q1 of financial 2021, an increase in the number of paid subscriptions was 21.2 million users, which is 59% more.
According to Bloomberg, Wall Street guys forecast a quarterly increase in the number of paid subscribers by 15.4 million on average, to 110.3 million people. However, the real number turned out 6.7 million users, or 43.5%, inferior to this.
Important report details
- Revenue — $15.6 billion, -13% compared to Q2, 2020.
- Return on stock — $0.5, +96%.
- Net profit — $912 million, +94.9%.
- The revenue of the media distribution and entertainment department — $12.44 billion, +1%.
- The revenue of the entertainment parks department — $3.17 billion, -44%.
Why does the number of subscribers grow slower?
The schedule of shooting new content for Walt Disney has been, as you might guess, ruined by COVID-19. To tell you the truth, almost all projects are at a halt. It's hardly arguable that attracting new users without new content is virtually hopeless.
Don't forget about quarantine measures being gradually softened either. Millions of people used to dive deep into the thrilling world of movies, series, and shows to get entertained or distracted in self-isolation. But now they're done enjoying streaming platforms and want to get back to real life and real entertainment.
Walt Disney shares dropped by almost 3%
On the day when the quarterly report was published, Walt Disney's (NYSE: DIS) stock price grew by 0.28% to $178.34. However, the next trading session closed 2.6% lower at $173.7. As you may guess, the growth of the number of new users disappointed investors.
Mind that since January, the stocks of the corporation have lost just 4%, falling from $181.18 to $173.7. The most successful trading day of the last 4.5 months was March, 8th: the shares grew by 6.27% reaching this year's high of $201.91.
Summing up
One of the most prominent representatives of the world's entertainment industry reported its results of Q2, financial 2021. The revenue in January-March dropped by 13% but the net profit almost doubled.
However, the number of paid subscriptions turned out to be inferior to the expectations of analysts: 8.7 million against 15.4 million. This reflected in the share price of the corporation immediately: it dropped by 3%.
