Disney+ surpasses 137.7 million subscribers, outperforming Wall Street expectations in streaming.

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Last quarter, Disney again outperformed Wall Street expectations in streaming, adding 7.9 million Disney+ subscribers and suggesting that the company is poised to take the lead in what has become a cutthroat race to the top in streaming.

While Wall Street’s expectations for Disney+ varied, the midpoint estimate was 4.5 million to 5 million subscribers.
Disney reported $19.2 billion in revenue and $3.7 billion in income, with earnings per share of $1.08. Wall Street expected revenue of $20.1 billion, operating income of $3.3 billion, and earnings per share of $1.17. The EPS shortfall could be attributed to a change in tax regulations, which increased the company’s effective tax rate from 8.8 percent a year ago to 45.8 percent last quarter.

Disney also paid a $1 billion penalty for terminating content licensing agreements early so that it could use the content on its own streaming service. Disney did not specify what that programming was, but it is most likely the Netflix output deal, which includes the streaming service’s Marvel series.

Despite a high-profile stumble by Netflix last quarter, Wall Street remains focused on the streaming business, and the company updated its efforts in the space Wednesday, with Disney+ adding 7.9 million subscribers last quarter to reach 137.7 million total. Hulu increased its subscriber base by 300,000 to 45.6 million (a Black Friday promotion last quarter may have accelerated some growth), while ESPN+ increased its subscriber base by 1 million to 22.3 million.

Disney reported $19.2 billion in revenue and $3.7 billion in income, with earnings per share of $1.08. Wall Street expected revenue of $20.1 billion, operating income of $3.3 billion, and earnings per share of $1.17. The EPS shortfall could be attributed to a change in tax regulations, which increased the company’s effective tax rate from 8.8 percent a year ago to 45.8 percent last quarter. Disney also paid a $1 billion penalty for terminating content licensing agreements early so that it could use the content on its own streaming service. Disney did not specify what that programming was, but it is most likely the Netflix output deal, which includes the streaming service’s Marvel series.

 

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