Disney missed Wall Street earnings forecasts during the fiscal fourth quarter as the entertainment giant is struggling with the streaming video business.
According to the company, net income rose 1% to $162 million in the quarter. Excluding some items, Disney earned 30 cents per share, missing Wall Street’s target of 55 cents per share. Revenue of $20.15 billion also fell short of the $21.25 billion expected.
“We expect our (direct to consumer) DTC operating losses to narrow going forward and Disney+ will still achieve profitability in fiscal 2024,” said CEO Robert Chapek in a statement. “Assuming we do not see a meaningful shift in the economic climate.”
On a conference call Chief Financial Officer Christine McCarthy forecasted revenue growth of less than 10% for the new fiscal year. The company reported 2022 fiscal revenue growth of 22%.
McCarthy said operating results at the streaming unit would improve by at least $200 million in the first quarter of 2023, compared with the quarter before.
According to the company, the company’s main service Disney+ reported 164.2 million subscribers, surpassing Factset estimates of 161 million. The streaming unit lost $1.5 billion during the period.
Despite gaining more streaming customers than expected in the period, investors have increasingly focused on profits over subscription numbers.
Disney theme parks posted robust growth despite Covid restrictions and Hurricane Ian forcing the temporary closure of Walt Disney World in Florida in September.
The parks unit reported revenue of $7.4 billion in the quarter, beating analysts’ forecasts.