Whatâs Going On Here?Disney announced stronger-than-expected quarterly earnings late last week, with all seemingly well again in the Magic Kingdom. What Does This Mean?There was a lot for investors to like in Disneyâs latest report. Streaming service Disney+ now boasts a higher-than-expected 116 million paying customers â closing the gap on arch-enemy Netflix, which has had a tough couple of quarters (tweet this).
But while the loss-making Disney+ is a bet on the companyâs future, its theme parks, experiences, and products segment speaks more to Toontownâs present. And this didnât just roar back to life last quarter: it returned to profitability for the first time since the pandemic began. Granted, the majority of the segmentâs profit came from people buying merchandise, but beggars canât be choosers â and with Disneylands getting busier, it probably wonât be long until the parks become profitable again in their own right. Why Should I Care?For markets: What can I say except youâre welcome?
Disneyâs share price rose 3% on Friday as investors booked back into the House of Mouse. While the average Disney+ subscriber may be paying a lower price than predicted, the company is still adding them faster than expected â and that should mean more profit in the long term. Theme parksâ reopenings, meanwhile, promise more profit in the short term too. And since theyâre largely an outdoor pursuit, those parks should prove relatively pandemic-proof if coronavirus takes a turn for the worse.
The bigger picture: Be our guest.
Airbnb also notched a better-than-expected second quarter, but it suffered from the flip side of the trends buoying up Disney right now â and its stock initially fell 3% on Friday. With new virus variants still a largely unknown quantity, the online travel platform warned investors that this quarterâs bookings (and cancellations) could lead to disappointing sales. | 