Shares of the streaming and entertainment giant Walt Disney (NYSE: DIS) hit a fresh 6-week high of $92.60 on Thursday after the company reported its third quarter fiscal year 2023 earnings. However, the stock failed to extend the bullish momentum later as the Q3 results were not that positive, and hence the investors also booked some profits after the earnings call. As of this writing, the stock trades below $88.
“Our results this quarter are reflective of what we’ve accomplished through the unprecedented transformation we’re undertaking at Disney to restructure the company, improve efficiencies, and restore creativity to the center of our business,” Walt Disney CEO, Robert A. Iger said.
The Q3 report showed that Disney beat earning expectations but missing revenue forecasts and Disney+ subscriber numbers. For the last quarter, Disney posted a 4% increase in revenue to $22.3 billion compared to $21.5 billion in the same year-ago period. While the numbers came below the expectations of $22.5 billion. Revenues for Disney Parks were up 13% for the quarter to $8.3 billion and income was up 11% to $2.4 billion.
“Our park experience segment has an overall impressive streak and will be a key growth engine for the company, even as we navigate the cycle that comes with operating this business,” Iger said.
Disney+ lost subscribers for the third quarter in a row
Disney reported another drop in subscribers for its streaming services. The streaming service lost 11.7 million subscribers in the second quarter of 2023. Disney had 146.1 million international customers in its third quarter, a 7.4% decline from the 157.8 million it reported in the second quarter. The dip in subscribers was precipitated by the loss of streaming rights for the highly popular Indian Premier League cricket matches.
Meanwhile, Walt Disney has revealed plans for another price increase to its Disney+ subscription service, marking the second rise in less than two years. The company is raising prices for the ad-free versions of Disney+ and Hulu by more than 20% each. Disney stock jumped after the announcement as investors expect the price hikes and the introduction of ad-supported tiers may help Disney retain customers.
“We’ve raised prices in nearly 50 countries around the world to better reflect the value of our product offerings, and the impact on churn and retention has outperformed our expectations,” – CEO Iger said.
Walt Disney (DIS) short-term Forecast: Is $100 still on the cards?
Looking at the stock from a very short-term perspective, it is evident that the stock retreats just after hitting a fresh 2-month high. However, the stock price is expected to rebound back to above $100 if the price holds above the downside support on the following chart. This region has generated strong bounces in the past nine months. Therefore, in the coming days, a move up to the $100 resistance is quite likely, a break above $100 would increase the potential of an extension to $104/05. On the downside, in case the stock closes below the key $83 support area, the slump will quickly extend toward the $80/79.50 mark.
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