Disney in its Q1 earnings for the 2022 fiscal year smashed expectations from Wall Street in both its earnings and revenues, and as a result the Mouse House’s stock price has jumped in after-hours trading.
The company reported revenue of $21.81 billion during the quarter that ended January 1, 2022, which represents its first quarter for the 2022 fiscal year. Wall Street expected Disney’s revenue to come in at $18.36 billion revenue. Wall Street had also expected an earnings per share of 61 cents, but Disney exceeded that significantly for the quarter posted a diluted EPS of one dollar and 6 cents.
As for Disney+, the streaming service added 11.8 million subscribers in Q1, which was well above analyst expectations of around 7 million. The number is buoyed by the success of “Encanto” but also other event programming such as “The Beatles: Get Back.”
Disney+ was just shy of 130 million paid subscribers. And CEO Bob Chapek was certainly positive about the results.
“We’ve had a very strong start to the fiscal year, with a significant rise in earnings per share, record revenue and operating income at our domestic parks and resorts, the launch of a new franchise with Encanto, and a significant increase in total subscriptions across our streaming portfolio to 196.4 million, including 11.8 million Disney+ subscribers added in the first quarter,” Chapek said in a statement. “This marks the final year of The Walt Disney Company’s first century, and performance like this coupled with our unmatched collection of assets and platforms, creative capabilities, and unique place in the culture give me great confidence we will continue to define entertainment for the next 100 years.”
Broken down by segment, linear networks revenues for the quarter were essentially flat to the prior-year quarter at $7.7 billion, and operating income decreased 13% to $1.5 billion. Domestic Channels revenues for the quarter increased 1% to $6.2 billion. And direct-to-consumer revenues for the quarter increased 34% to $4.7 billion, though operating loss increased 27% to $0.6 billion. The increase in operating loss was due to higher losses at Disney+, and to a lesser extent, ESPN+, partially offset by improved results at Hulu.
The content sales and licensing unit, which included the co-production of the box office juggernaut “Spider-Man: No Way Home,” increased 43% to $2.4 billion. “Spider-Man” helped offset some of the losses of films like “West Side Story,” “The Last Duel” and “Encanto.”
On the theatrical end, Disney had committed to putting all of its movies released in the last quarter in theaters for an exclusive window of at least 45 days, with the exception of “Encanto,” which had a 30-day theatrical window before hitting Disney+.
At Disney’s parks, the Parks, Experiences and Products revenues for the quarter increased to $7.2 billion compared to $3.6 billion in the prior-year quarter, in part because of both higher volumes as COVID restrictions lessened but also increased spending.