Disney Slides As Membership Numbers Surprisingly Fall

Walt Disney (DIS:US) shares tumbled around 8% on Thursday after the media and entertainment business reported a mixed set of Q1 results.

Disney posted a profit per share of $0.93 on revenue of $21.82 billion, which was in line with the analyst consensus for earnings of $0.93 per share on sales of $21.78 billion.

“We’re pleased with our accomplishments this quarter, including the improved financial performance of our streaming business, which reflect the strategic changes we’ve been making throughout the company to realign Disney for sustained growth and success,” said Robert A. Iger, Chief Executive Officer, The Walt Disney Company. 

On the negative side, Disney said it recorded 157.8 million Disney+ subscribers at the end of the first quarter, missing the 163.17 million consensus. The end-of-Q1 figure actually represents a decline of about 2% while analysts were looking for an increase of almost 1%. Moreover, the average revenue per user (ARPU) was $4.44, below the expected $4.52.

Still, Disney said it made continued progress to make its direct-to-consumer (DTC) business profitable. DTC, which is centered around the streaming business, posted a $659 million loss on revenue of $5.51 billion. Analysts were looking for a loss of $841 million.

The company also said it will add Hulu content to its Disney+ streaming app while simultaneously raising the price of its ad-free streaming service later this year.

On a positive note, the company’s legacy theme parks business has delivered another set of very good results.

Congressman Ro Khanna was actively trading Disney shares in recent months, including the sale of stock last month while it was trading around $100 apiece. 

Disney shares were exchanging hands in the low $90s in the early Thursday trade.