Disney stock climbs 4% after streaming subscriptions jump and tourists flock to theme parks in Q3
- Disney stock rose 4% on Friday after the company reported strong subscriber growth and theme-park demand.
- Disney Plus subscribers doubled year-on-year to 116 million as Luca and Loki fueled signups.
- Revenue from theme parks and experiences rose to $4.3 billion, up from $1.1 billion a year ago.
Disney stock rose 4% in Friday's premarket session after the entertainment juggernaut posted third-quarter earnings that beat Wall Street's expectations.
Subscribers to the company's flagship streaming service, Disney Plus, grew by 12 million in the quarter and doubled year-on-year to 116 million. Combined subscriptions to Disney+, ESPN+, and Hulu hit nearly 174 million in the period.
Hits on the Disney+ service that contributed to new subscriber growth included Pixar's Luca, and Marvel's Loki and The Falcon and the Winter Soldier. The company also released a hybrid of theatrical-plus-premier films including Cruella, Jungle Cruise, and Marvel's Black Widow, which prompted star Scarlett Johansson to sue Disney for the dual release.
Disney said its average revenue per user has decreased recently because of the lower prices for its Disney+Hotstar subscription in Indonesia and India. However, this has aided its subscriber growth. Streaming revenue rose 57% year-on-year to $4.3 billion.
The company's theme parks and resorts were shuttered by the pandemic in early 2020, but have been open at reduced capacity since May 2020. Yet buoyant demand generated $4.3 billion in revenue for the division last quarter, far exceeding the $1.1 billion it earned in the same period of 2020.
Disney is continuing to experiment with film releases as it feels out theatrical demand. Ryan Reynolds' action comedy "Free Guy" and Marvel's "Shang-Chi and the Legend of the Ten Rings" are being exclusively released in cinemas, CEO Bob Chapek said on the earnings call.
"Disney+ has proven it can mix in with the other streaming giants such as Netflix and Amazon after disappointing with new subscribers last time round," said Adam Vettese, analyst at multi-asset investment platform eToro.
Until the pandemic struck, theme parks and experiences had been Disney's main driver of revenue, Vettese said, adding that it's highly likely that'll be the case again now that parks are open.
"The challenge will be maintaining the momentum into the end of the year, when it will be competing once more for people's attention in a largely restriction-free society," he said.
Disney said it has a total addressable market of 1.1 billion households across the globe.