The Walt Disney Co. announced their Q1, 2022 fiscal year results on Feb. 9, posting higher revenue numbers from media distribution, Disney+ subscriptions, and theme parks, exceeding expectations of Wall Street analysts.
Distribution income rose from $12.661 billion to $14.585 billion, an increase of 15 percent. Linear networks, direct-to-consumer, and content sales/licensing all reported higher revenues for the quarter. Revenues from linear networks rose from $7.693 to $7.706 billion. However, operating income from the segment registered a loss of 13 percent.
Direct-to-consumer revenues rose 34 percent to $4.690 billion. But operating income loss rose from $466 million to $593 million. The increased operating costs were due to higher losses incurred by the company’s Disney+ streaming service with more money spent on programming and production for content.
On the plus side, the subscriber base for Disney+ rose from 94.9 million to 129.8 million, a 37 percent increase. Moreover, average monthly revenue per paid subscriber rose 9 percent to $5.16. Subscribers for ESPN+ rose 16 percent to 40.9 million while Hulu subscriptions jumped 15 percent from 39.4 million to 45.3 million.
“We’ve had a very strong start to the fiscal year, with a significant rise in earnings per share, record revenue and operating income at our domestic parks and resorts, the launch of a new franchise with Encanto, and a significant increase in total subscriptions across our streaming portfolio to 196.4 million, including 11.8 million Disney+ subscribers added in the first quarter,” Bob Chapek, CEO of Disney, said in the report.
Despite Disney+ getting 129.8 million subscribers, it is far behind streaming giant Netflix, which boasted 221.84 million subscribers as of Q4, 2021.
Revenue from content sale/licensing and other sources surged by 43 percent to $2.4 billion. Operating income suffered a loss of $98 million. Many titles released by the company suffered losses during the quarter. But these losses were partially offset by the box office income generated from its Sony co-production movie Spider-Man: No Way Home which turned out to be a global blockbuster.
Disney’s revenue from parks, experiences, and products rose over 100 percent from $3.588 billion to $7.234 billion. Total operating income surged from a loss of $119 million to a profit of $2.45 billion, thanks to higher performance at international parks and resorts.
While Disney’s domestic parks and resorts remained open for the entirety of Q1, 2022, Disneyland Resort had to be shut down for the prior year’s quarter while the Walt Disney World Resort could only operate at reduced capacity at that time due to government COVID-19 restrictions.
Internationally, Disneyland Paris and Disneyland Hong Kong saw higher attendance that contributed to income growth. While the Paris venue was open for the entire Q1, 2022, it only opened for 26 days in the same quarter the previous year.
“This marks the final year of The Walt Disney Company’s first century, and performance like this coupled with our unmatched collection of assets and platforms, creative capabilities, and unique place in the culture give me great confidence we will continue to define entertainment for the next 100 years,” Chapek said. Disney was founded on Oct. 16, 1923.
Chapek’s reelection as Disney’s CEO is due on March 9. A group of Disney fans have reportedly brought stocks of the company and are threatening to vote against Chapek at the reelection meeting. The fans, who are angry at long queues at theme parks and surging ticket prices, are organizing on Reddit.
