Disney shares were flat in after-hours trading after the entertainment giant missed revenue estimates, but posted a small profit for its fiscal third quarter, the first that overlapped entirely with the COVID-19 pandemic.
For the quarter ending in June, Disney (DIS) - Get Report reported revenue of $11.78 billion, a 42% drop compared to last year, and its diluted earnings fell 94% to 8 cents per share. Analysts were expecting a loss of 64 cents per share and revenue of $12.4 billion, according to FactSet.
Disney shares fell initially in the minutes following the report, but recovered to a 2% overall gain before falling again to roughly flat.
“Despite the ongoing challenges of the pandemic, we’ve continued to build on the incredible success of Disney+ as we grow our global direct-to-consumer businesses,” said Bob Chapek, Disney's CEO. “The global reach of our full portfolio of direct-to-consumer services now exceeds an astounding 100 million paid subscriptions -- a significant milestone and a reaffirmation of our DTC strategy, which we view as key to the future growth of our company.”
Disney ended the quarter with 57.5 million Disney+ subscribers, 8.5 million ESPN+ subscribers and 35.5 million total Hulu subscribers, according to its press release.
Meanwhile, its Parks, Experiences and Products revenue fell 85% to $983 million, Media Networks revenue fell 2% to $6.56 billion, and Studio Entertainment revenue fell 55% to $1.74 billion. Total Direct-to-Consumer and International revenues grew 2% to $3.97 billion.
Disney's business has been hit hard by the COVID-19 pandemic, with the virus disrupting operations in its parks and cruise operations, delaying film releases, and damaging television ad revenue.
Shares were down 20% year to date heading into earnings.