Disney’s fiscal first-quarter earnings beat expectations, though, shares rose and fell in after-hours trading, when the announcement was made, and Disney+ subscriptions were up from 10 million in November to now 28.6 million.
The house that Mickey built reported earnings per share of $1.53 vs. $1.44 expected, according to Refinitiv. Revenue also scored a win at $20.86 billion vs. $20.79 billion expected.
It was the first earnings report since the Nov. 12 launch of Disney+, which CEO Bob Iger said “exceeded even our greatest expectations,” going to 28.6 million subscribers with an average of $5.56 in revenue per user.
According to Iger, about 20% of Disney+ subscribers signed up through a free trial with wireless carrier Verizon, and about 50% signed up directly through the site, and “many of them have bought a year-long service or even a three-year” subscription.
“Both conversion from free to pay and churn rate were better than expected,” Iger said, referring to the pace users sign and then unsubscribe.
Disney did not update guidance for its new service, but it has previously said it expects to have between 60 million and 90 million subscribers by the end of the 2024 fiscal year.
“Well, it’s obviously a very good start, but we are not updating our guidance today,” Iger said on CNBC’s “Closing Bell” program. “We will say something on the call about subs between the end of the quarter, the end of December and where we are as of yesterday. But we are not updating our guidances.”
Iger also said during the earnings call that ESPN+ has 7.6 million subscribers, generating $4.44 in revenue per sub, and Hulu has 30.7 million, generating $59.47 in revenue per sub.
Disney’s movie department made $3.76 billion in revenue during the quarter, up from $1.8 billion during the same period a year ago. The spike was mostly due to the successful theatrical releases of “Frozen II” and “Star Wars: The Rise of Skywalker.”
Parks, Experience and Products revenue was up 8% to $7.4 billion year over year, due in large part or the opening of the new Star Wars: Galaxy’s Edge theme park, and operating income increased 9% to $2.3 billion.
International parks were of course hit by the Hong Kong protests, as well as the recent coronavirus outbreak in China, where a number of operations have been suspended until the outbreak subsides.
The earnings news was immediately met with a bump in share price in after-hours trading Tuesday but enthusiasm died a bit today, with shares down about 2.5% to $141.14 at 2:45 p.m. EST.
Full disclosure: The author of this piece holds a small position in Disney stock.