Entertainment giant Walt Disney reported a blowout quarter with parks returning to profitability for the first time since the pandemic struck. Earnings came in at $0.80 per share versus expectations of $0.55 as subscriber figures for its streaming service Disney+ also beat forecasts at 116 million.
The three months to 30 June showed Disney’s strongest sales and profit since before the Covid-19 pandemic began, sending its shares soaring 5% in after-hours trading to $179.29.
Disney’s $0.80 earnings came on the back of revenues of $17.02 billion, which also beat analyst estimates, pitched at $16.76 billion. Disney’s parks, experiences and products business saw sales soar more than 300% to $4.3 billion.
‘Theme parks and resorts resumed operations, generally at reduced capacity, at various points since May 2020 through June 2021 and we have commenced an ongoing return of cruise ship sailings and guided tours,’ the company said.
STREAMING GROWTH
Disney’s streaming business, which also includes international products, hauled in $4.26 billion in revenue, in line with analyst’ forecasts of $4.27 billion on average.
‘We continue to introduce exciting new experiences at our parks and resorts worldwide, along with new guest-centric services, and our direct-to-consumer business is performing very well, with a total of nearly 174 million subscriptions across Disney+, ESPN+ and Hulu at the end of the quarter, and a host of new content coming to the platforms,’ said Bob Chapek, Disney’s chief executive.
But Disney will not be rushing to resume share buybacks or dividends, both which were axed when the pandemic broke. Finance head Christine McCarthy noted that while the company anticipates both dividends and share repurchases will remain a part of Disney’s capital allocation strategy, investors will have to be patient.
‘We don’t anticipate declaring a dividend or repurchasing shares until we return to a more normalised operating environment and our leverage is back to levels more consistent with a single-A credit rating,’ McCarthy said.
