The Walt Disney Company reported stellar fiscal first-quarter results Wednesday. Its earnings managed to beat average analysts' estimates for the period, indicating its rapid recovery following years of losses due to the COVID-19 pandemic.
Disney reported adjusted earnings per share of $1.06 for the three months, beating analysts' estimates of $0.63 per share. The company reported revenues of $21.82 billion for the quarter, slightly higher than the $20.91 billion expected by Wall Street.
Disney said its earnings were significantly bolstered by strong streaming numbers. The company increased the total subscriptions to its Disney+ streaming service to 129.8 million, higher than the 125.75 expected by analysts. Disney executives previously stated that they expect subscribers numbers to be higher during the second half of last year following plans to release more original content on the platform.
For its first fiscal quarter, approximately 12 million Disney+ subscribers were added to the total. In the United States and Canada, the service's average revenue per user (ARPU) increased to $6.68 per month from $5.80 a year before.
During the company's earnings call, CFO Christine McCarthy stated that Disney expects to spend a significant amount of money on streaming in the second quarter. She said the company expects direct-to-consumer programming and production costs to rise by $800 million to $1 billion, including programming fees for Hulu live. They anticipate a $500 million increase in linear expenses.
Meanwhile, the company reported strong numbers for its parks, experiences, and consumer products division. Revenue generated by the division reached $7.2 billion for the quarter, double the $3.6 billion generated over the same period last year. Disney said the revenue growth can be attributed to the reopening of its theme parks in the U.S. and other countries as they gradually reopen.
Disney's domestic parks had fewer Covid-19 capacity restrictions in the most recent quarter. The company said mandatory capacity and travel limits do continue to affect its overseas theme parks and attractions. The company added that as guests return to their parks, cruises, and hotels, they expect revenues to continue to grow in the coming quarters.
Following the closure of a large portion of its Disney-branded retail stores in the second half of 2021, the company's consumer products business saw revenue drop by 8.5% to $1.5 billion.
Despite the fact that Disney's television and film operations have restarted, the company's pipeline continues to be disrupted. The company's theatrical releases were among the year's best-performing pictures. However, the domestic box office has yet to fully recover from the pandemic.
