It’s not just the tech industry that performed poorly in the stock market recently. The Walt Disney Company announced that its market performance has taken a huge nosedive.
According to Deadline, the company broke the news to investors with a Star Wars reference, titling its report with “These Are Not The Results You’re Looking For.” The company’s stock was at its lowest point since 2014, closing at $86.75 a share.
Finance analyst, Michael Nathanson, admitted his mistake of predicting Disney’s forecast after he said that the company could expect “growth of high-single-digits.” He says the reason why Disney underperformed was due to “direct-to-consumer” losses, more specifically via their linear TV networks.
“Rarely have we ever been so incorrect in our forecasting of Disney profits. Given the company’s confidence that Parks trends appear resilient, it appears that the culprit for the massive earnings downgrade is much higher than expected DTC losses and significant declines at linear networks.”
Disney’s earnings report says its traditional businesses, such as linear TV, faced pressure due to people moving to streaming platforms. Speaking of streaming, The Walt Disney Company announced that Disney Plus added an extra 12.1 million subscribers, totaling 164.2 million globally.
It’s not all bad news for Disney. UBS Media and Telecom Analyst, John Hodulik, told Deadline that he sees a future for Disney in streaming and suggested that the company should consider transitioning to that type of market.
“While the macro environment presents challenges, we still view Disney as best positioned for the transition to a streaming future.”
Following the earnings, people, including financial experts, are calling for CEO Bob Chapek to be fired following the huge misstep.
Back in Q3, The Walt Disney Company reported that it has surpassed Netflix’s total subscriber count, but couldn’t beat the streaming giant through each platform’s individual numbers. Disney’s CEO, Bob Chapek, announced plans to merge Hulu with Disney Plus around 2024 after the Comcast buyout is complete.
At the moment, the company has not announced plans for layoffs, despite the current trend that most tech companies are facing after reporting financial losses. Twitter and Meta announced layoffs after both companies faced financial trouble. Despite the earnings, Disney has not yet announced if it will put all its focus on its streaming platform.
