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Disney Shares Fall On Warning That Streaming Growth Is Slowing
Shares of Walt Disney (NYSE:DIS) fell after Chief Executive Officer Bob Chapek warned that movie and TV production delays will temper the growth in new streaming customers this quarter.
Chapek, speaking at an investor conference, said Disney has 61 movies and 17 episodic TV shows in production, but the rise of the Delta variant of COVID-19 has resulted in some production slowdowns which could hurt its streaming subscribers.
Consequently, Chapek said the number of new subscribers to the Disney+ streaming service would be in the "low-single-digit millions of subscribers" for the current period compared with the previous one.
Disney stock fell as much as 5.4% to $169.03 U.S. in New York trading on the news. They are now down 1.4% this year.
Disney+, the company's main streaming service, has been a huge growth engine for the company, particularly with people stuck at home and watching more TV during the pandemic. It now has more than 116 million subscribers globally. Analysts are forecasting about 125.7 million subscribers for the company's soon-to-end fiscal fourth quarter.
Disney is planning a big promotion for November 12, the two-year anniversary of the streaming service's launch. Customers will have access to the new Marvel film, "Shang-Chi and the Legend of the Ten Rings," which was previously only in movie theaters.
Chapek said theme-park reservations for the quarter remain stronger than the previous one. He also said he's looking to be more "aggressive" in terms of the company's presence in sports betting, including potentially signing additional partnerships for the company's ESPN brand.
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