Disney streaming growth disappoints, earnings beat forecasts

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(Reuters) -Walt Disney Co’s streaming growth fell short of Wall Street estimates on Thursday after seeing strong consumer demand early in the pandemic, while the company’s quarterly profit topped forecasts.

Shares of Disney fell 3.7% in after-hours trading.

CEO Robert Chapek said that movie and television shows were resuming normal production and new offerings would help spur subscriber growth across Disney+, ESPN+, Hulu and Hotstar.

Adjusted earnings-per-share came in at 79 cents for January through April 3, Disney said. Analysts had expected 27 cents, according to IBES data from Refinitiv.

Disney is focusing on quickly building its streaming service to challenge Netflix Inc (NASDAQ:NFLX) as audiences move away from cable TV. The company’s popular theme parks remain in recovery mode with attendance limits due to the COVID-19 pandemic.

Disney+ reached a total of 103.6 million customers as of early April, the company said. Two Marvel superhero series, “WandaVision” and “The Falcon and the Winter Soldier,” debuted during the quarter. Analysts had projected 109.3 million, according to FactSet.

The average monthly revenue per paid subscriber for Disney+ decreased from $5.63 to $3.99, the company said, due to the launch of Disney+ Hotstar in overseas markets. Factset estimates showed Wall Street was expecting average revenue of $4.10 per user.

Overall revenue fell 13% to $15.61 billion in the second quarter ended April 3, compared with analysts’ estimate of $15.87 billion, according Refinitiv.

Net income from continuing operations rose to $912 million, or 50 cents per share, in the second quarter from $468 million, or 26 cents per share, from a year earlier.

Disney reached a renewal deal through 2028 with Major League Baseball with 30 exclusive regular season games. The deal includes an option to simulcast all live MLB coverage for ESPN networks on ESPN+.

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