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Walt Disney Company shares fall

11 November 2021
2 min.
Walt Disney Company shares fall

The company's business is not growing the way investors want it to

Disney (DIS) on Wednesday released its earnings and revenue report for the 4th quarter and full fiscal 2021 ended 2 October.

The quarterly report was worse than market analysts' forecasts, with streaming service Disney adding just 2.1 million, compared with adding 12.4 million in the previous quarter.

Main thesis of the report

Market analysts say Disney's business is not growing the way investors want it to today. During Wednesday's conference call for Disney's report, executives hinted at expectations of stronger growth closer to the end of next year.

The company intends to invest more in creating content for its Disney streaming service, while Disneylands is not yet operating at full "capacity" as visitor numbers remain restricted by quarantine conditions and international tourism has yet to recover.

Approval of the Covid-19 vaccine for children aged 5 to 11 in the US should help boost future attendance at Disney parks, CEO Bob Chapek expects.

Disney report compared to market analysts' forecasts

Disney's Q4 earnings per share rose to $0.37, worse than the $0.51 analyst forecast.

Revenues rose 26% (from last year's value) to $18.53 billion, but were also worse than Wall Street estimates of $18.79 billion.

For the full year 2021, Disney's revenues were up just 3% from the last fiscal year, but the company made a profit of $2 billion compared to a loss of $2.83 billion in 2020.

Quarterly revenues for its main media division (Disney Media and Entertainment Distribution) rose 9% to $13 billion.

Quarterly revenue from the parks and specialty shops segment (Disney Parks, Experiences and Products) doubled to $5.45 billion, up from $2.73 billion in Q4 fiscal 2020. The parks segment also posted a profit compared to a loss last year.

Disney forecasts

According to Disney CFO McCarthy, as the company plans to increase content for Disney management expects the service's loss to peak in FY2022 rather than FY2021.

Disney also said that the company's parks are looking forward to the return of international tourists, but this traffic is not expected to significantly impact segment revenues until the second half of FY 2022.

Markus Hansen, manager of investment firm Vontobel Asset Management, said: "If Disney manages to achieve their goals in five years they will create something as big as Netflix worldwide."

Persons3 and Companies2 in the news

Manager of Vontobel
1 place
Chief financial officer of Walt Disney Company
2 place
Chief executive officer of The Walt Disney Company
3 place


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