US stock markets: Walt Disney shares tumble over 9% after quarterly results

Walt Disney Co. shares tumbled more than 9 per cent on Tuesday morning in New York after the media giant announced its quarterly financial results and forecasts for the current quarter.

At 11:48 a.m. EDT, the Walt Disney stock was at $104.90, lower 9.93 per cent.

The direct-to-consumer business, which includes Disney and Hulu, posted quarterly operating income of $47 million compared with a loss of $587 million a year earlier. 

Revenue rose 13 per cent to $5.64 billion.

For the combined streaming businesses, which includes Disney , Hulu and ESPN , second-quarter operating loss shrunk to $18 million from $659 million, while revenue improved to $6.19 billion from $5.51 billion.

The company added more than 6 million subscribers in the second quarter to its Disney streaming platform.

“Looking at our company as a whole, it’s clear that the turnaround and growth initiatives we set in motion last year have continued to yield positive results,” Walt Disney chief executive officer Bob Iger said in a statement.

Walt Disney chief financial officer Hugh Johnston said the company doesn’t expect to see core Disney subscriber growth in the current quarter and profitability in streaming will suffer due to additional expenses for cricket rights in India.

“We are pleased with the progress we’re making in streaming, although, as we said before, the path to long-term profitability is not a linear one,” Johnston said.

The company said it took an impairment charge of about $2 billion in the second quarter related to the India deal and to its traditional television networks.

It expects its entire streaming business to be profitable in the fourth quarter. 

The company is planning to add an ESPN tab to Disney by the end of the year.

Disney’s theme parks registered revenue growth of 10 per cent in the second quarter and the segment posted a 12 per cent gain in operating income also.

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Published: 07 May 2024, 09:36 PM IST

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