One of the more obvious post-pandemic reopening plays -- entertainment giant Walt Disney (NYSE:DIS) -- is finally starting to show signs of life. The media mogul posted better-than-expected financial results shortly after Thursday's market close. Disney also managed to pepper its performance with some encouraging developments.
We may as well start with the top- and bottom-line results. Revenue soared 45% to top $17 billion, ahead of the 43% year-over-year surge that analysts were targeting. It's a big jump, but it's all relative. Keep in mind that Disney theme parks and cruise ships as well as all U.S. movie theaters were closed for the entirety of the fiscal third quarter a year ago. We have to go back another year to the $20.3 billion it served up in fiscal 2019 to get the more accurate snapshot, and a 16% decline over the past two years doesn't seem like a bad trade for a company with a lot of runway left in the global economic recovery process.
Disney's adjusted earnings of $0.80 a share also blew past the $0.56 a share that Wall Street pros were forecasting. It was the beat that Disney needed, but the good news didn't stop there.
It's a great big beautiful tomorrow
There were two things that tripped Disney up last time out. We had the House of Mouse clock in with a rare top-line miss, and we already covered how Disney cleared that hurdle this week. The other zinger in May came at the hands of weaker-than-expected growth in Disney+, as the 103 million subscribers that the media bellwether had on its streaming platform by the end of March were millions fewer than analysts were modeling.
On Thursday we learned that there are now 116 million Disney+ subscribers, comfortably ahead of the 114.5 million that Wall Street pros were estimating. It gets better on that front. The average revenue per user (ARPU) on the Disney+ platform declined 10% year over year to $4.19 a month. This is a metric that's been steadily declining since the service began expanding internationally last year, as India's Disney+ Hotstar -- with much lower rates -- is accounting for much of its recent growth.
How is this good news? Well, three months ago ARPU was at only $3.99 a month. This is the first sequential increase for Disney+ since shortly after its late 2019 launch. An increase in rates for U.S. subscribers helped prop that figure higher, but that only makes the healthy sequential uptick in subscribers -- 13 million net additions for the three-month period -- that much more impressive.
If you want more encouraging signs, Disney's theme park segment reported its first profit since the pandemic. The recent spike in delta variant-fueled COVID-19 cases isn't weighing on guest demand. Current park reservations are higher than the attendance levels in the recently concluded fiscal third quarter.
Things aren't perfect, but Disney is clearly moving in the right direction. It continues to be the envy of all media stocks, and after essentially marching in place through 2021 -- down 1% year to date through Thursday's close -- it's starting to finally roll again.
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