Disney’s Q2 Results Failed to Impress Again

Disney shares fell about 0.73% yesterday, on August 9, but advancing by 1.54% on today’s U.S. premarket. Disney's earnings report came at a time of turmoil for the company's stock, which has lost 20% over the past 5 years, lagging far behind the S&P 500's return of about 60%. Revenues grew 4% for the quarter, to $22.33 billion, short of expectations for 4.8% growth and $22.53 billion in numbers.

The epic company's parks and linear TV divisions continued to perform well, though, with quarterly operating income of $1.1 billion and $1.9 billion, respectively, being in line with expectations, while Disney's more prominent direct-to-consumer media businesses, including Disney+, declined, while ESPN+ and Hulu posted losses of $512 million, below expectations for a loss of $758 million.

The company reported a precipitous decline of Disney+ subscribers by 12 million, even though the loss was a moderade ~1% in the U.S. and Canada. Much of Disney's balance sheet woes stem from the fact that its traditional media division is grappling with the decline in linear TV's popularity: Media and entertainment operating profit was $1.1 billion in the reporting period, compared with $1.9 billion a year earlier and ~$3 billion 5 years ago.