Walt Disney Gains After Raising Prices of Streaming Services
Walt Disney (DIS:US) shares rose on Thursday after the media and entertainment giant reported results for its third fiscal quarter.
The company reported adjusted earnings per share (EPS) of $1.03, compared to $1.09 in the same period last year. The Street estimate was $0.99. Revenue for the quarter reached $22.33 billion, up 3.8% year-over-year, slightly below the estimate of $22.51 billion.
Disney’s media and entertainment distribution revenue was $14 billion, down 0.8% year-over-year, missing the estimate of $14.36 billion. This business segment hosts Disney’s flagship streaming business “Disney+.”
On the other hand, the parks, experiences, and products revenue increased by 13% year-over-year, reaching $8.33 billion, surpassing the estimate of $8.25 billion.
Disney CEO Robert Iger commented on the company’s performance, stating, “In the eight months since my return, these important changes are creating a more cost-effective, coordinated, and streamlined approach to our operations that has put us on track to exceed our initial goal of $5.5 billion in savings as well as improved our direct-to-consumer operating income by roughly $1 billion in just three quarters.”
Disney has also announced that it will be increasing the prices for its streaming services, Disney+ and Hulu without commercials. However, the company has decided to keep the prices stable for the products that include ads.
The company is also introducing a new bundled package called the “premium duo.” This package will include Disney+ and Hulu without commercials and will be priced at $19.99 per month.
Disney’s streaming division lost $512 million in its third quarter.
Congress members Ro Khanna, Zoe Lofgren, and Michael McCaul were all trading DIS shares recently. Most notably, Rep. McCaul was aggressively selling shares on May 01, when the stock closed at $102.21.
Disney shares were seen trading around $90 apiece on Thursday.
