Disney shares drop as Q4 falls short and rival Netflix steps up

[MongiIG]

Disney's fiscal fourth quarter earnings and revenue numbers fell short, and there was a drop in average revenue per user. Added to this, Netflix is expanding its offering to live sports which piles the pressure on Disney’s board.

 Jeremy Naylor | Writer, London | Publication date: Wednesday 09 November 2022

Q4 earnings bite

The stock of Walt Disney fell in excess of 6% all sessions on the IG platform late last night as a result of fiscal fourth quarter (Q4) earnings that were released after the bell.

It fell short of expectations for profit and key revenue segments during the fiscal fourth quarter, but saw strong streaming growth for its Disney Plus platform.

We saw earnings per share (EPS) come in at $0.30, estimates have been for 59. Revenues of $20.15 billion, also fighting shy of the estimates of more than $21.3 billion.

The chief executive of Disney, Bob Chapek, said in the earnings release that Disney Plus will achieve profitability in fiscal 2024. The Direct to Consumer Division lost $1.47 billion during the most recent quarter. It also reported a 10% drop in domestic average revenue per user to 6.1%.

Disney share price

Let's take a look at Disney share prices because this is all sessions and we've just got the open today.

Further down, we're down half of 1%. This is how the stock moved in yesterday's trade all the way on the way down. And in fact, at one point yesterday ending down at the worst point, down at levels not seen since pretty much the Covid lows. back in March 2020, there was a recovery towards the end.

But as I say, we're now building on the downside again all sessions on the IG platform indicating potentially a weaker start to the trading day ahead when things get underway.

Netflix

Also in a follow up on Netflix , which is a rival to Disney Plus on the streaming business, according to The Wall Street Journal, Netflix is exploring investments in live sports broadcasting and its recently bid for the streaming rights for sports leagues.

It's the first time it's gone into this area of broadcasting, live broadcasting. It'll be interesting to see whether or not it gets any traction on this. And if it does, it could well give it an extra leg beyond that offered by Disney Plus, we'll have to see how things develop.

Netflix all sessions on the IG platform currently down half of 1% after yesterday's gains that we saw. The big move up that we've seen recently is the fact that Netflix now undercuts Disney at the discount end of the streaming market.