Streaming costs drag Disney earnings below estimates
STORY: Walt Disney said on Tuesday its marquee streaming service, Disney+, gained more subscribers than Wall Street had expected…
but investment costs dragged quarterly earnings below analysts’ targets...
Shares in Disney fell more than 5% in after-market trading as investors increasingly focus on profits over subscription numbers.
Still, Disney+ reported 164.2 million subscribers in the fiscal fourth quarter, surpassing Factset estimates…
but the cost to build the streaming service led to a $1.5 billion loss in the direct-to-consumer unit, which hurt quarterly earnings.
Excluding some items, Disney earned 30 cents per share, missing Wall Street's target.
Disney has amassed a total of 235 million subscriptions across Disney+, Hulu and ESPN+ streaming services, a gain of 14.6 million from the previous quarter.
The company repeated comments in August that losses from its direct-to-consumer business would peak in fiscal 2022 which ended Oct. 1.
The ad-supported version of the Disney+ service will launch in the United States on Dec. 8, bringing a new source of revenue to underwrite the billions the company spends creating original movies and series for the services.