Disney sinks 5% after CEO Bob Chapek warns about Disney+ subscription growth and says delta variant is creating production delays
Disneyfell as much as 5% after CEO Bob Chapek warned about upcoming subscriber results for its streaming products.
- Speaking at Goldman Sachs' media conference, he said growth will be choppy in the shorter-term.
- Chapek added that the delta variant of COVID-19 has contributed to production delays.
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Disney stock fell as much as 5% Tuesday afternoon after CEO Bob Chapek warned investors that the delta variant surge of COVID-19 is creating production delays and could lead to choppy growth for the Disney+ streaming business.
Chapek said that while he still expects Disney+ subscriptions to hit its long-term targets, growth will be uneven in the shorter-term, with probably more "noise" than Wall Street analysts expect. The comments from Chapek came at a Goldman Sachs' Media conference on Tuesday.
The COVID-induced production delays will lead to less product being on the Disney+ streaming platform, possibly making the offering less enticing for consumers amid the ongoing content wars between streaming companies like Netflix and HBO Max.
For Disney's fiscal fourth quarter, Chapek expects an increase of low single-digit-millions to its streaming platform ex-Hotstar, which is Disney's streaming service for the Indian market. Meanwhile, Chapek said Disney's Star+ streaming platform in Latin America is off to a slow start.
Rich Greenfield of Lightshed Partners said, "None of the
After missing consensus views in the fiscal second quarter, Disney beat them in the third. Disney+ had about 116 million paid subscribers at the end of June.
Despite the potential weakness in Disney's streaming business, Chapek said that it is seeing strength in its theme park business despite the COVID-19 surge, and that its cruise ship bookings have seen momentum going into the second half of next year.
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