Walt Disney (NYSE: DIS) shares were 9% higher following the company beating expectations on the top and bottom line. The company had strong performance across all its units including its theme parks division which is a beneficiary of the travel boom. Disney+ also beat expectations as the company reported 152.1 million subscriptions and 221 million across all of its properties which means it's now exceeded Netflix (Nasdaq: NFLX) in terms of total subscriber count.
Since its peak in February of last year, Disney dropped more than 50% before bottoming in July of this year. Since then, shares are higher by nearly 35%. Additionally, the company's valuation has become quite attractive due to its combination of earnings growth and the bear market. Disney has a forward P/E of 22, while analysts are projecting triple-digit EPS growth over the next 12 months.
Inside the Numbers
In Q2, Disney reported $1.09 in earnings per share, topping expectations of $0.96 per share. Revenue also beat expectations at $21.5 billion vs $20.96 billion.
Total subscriptions for Disney+ at 152.1 million exceeded 147.8 million subscribers. Disney's streaming services are emerging as a winner in the crowded space due to Netflix losing subs, while HBO Max (NASDAQ: WBD) is pivoting to a new strategy. Disney+ is also launching an ad-supported version of Disney+ at a lower price point. It also raised the price of the ad-free version of Disney+ to $10.99 per month, a 38% increase.
It wasn't all positive news for Disney+ as revenue per user declined by 5% with some customers opting for a multiproduct offering. Rising content costs meant a loss of $1.1 billion across Disney+, Hulu, and ESPN+. It also reduced its 2024 forecast for subscribers to 215 million to 245 million from its previous range of 230 million to 260 million. It did say Disney+ will be profitable by 2024.
Its Parks, Experiences, and Products division revenue jumped by 72% to $7.4 billion due to a combination of increased park attendance, room occupancy, and cruise ship bookings. The company launched 2 new in-park offerings to increase revenue and is getting closer to a return to normalcy with the re-introduction of character meet-and-greets, theatrical performances, and nighttime events.
It also said that demand continues to exceed the company's capacity and that per-person spending at the park was up 10% and more than 40% above pre-pandemic levels.