Streaming May Slow Down for Disney. Should Investors Steer Clear of the Stock?
The good news is that Walt Disney's (NYSE: DIS) streaming losses continue to shrink, largely thanks to cost cuts. The bad news is that its streaming subscriber growth has evaporated -- possibly because of these cost cuts. And it's not clear how, when, or even if the company's streaming arm will get over the profit hump as it stands now.
In its fiscal second quarter, which ended April 1, Disney brought in $21.8 billion in revenue, from which it booked operating/non-GAAP earnings of $0.93 per share. Sales were up 13% year over year while profits slipped 14%. Both numbers were in-line with expectations. Disney's film, TV, and theme park businesses continue to do well by virtue of generating operating income, although its linear TV and media/entertainment arms suffered declining bottom lines last quarter.
The one real sore spot? Its direct-to-consumer unit -- aka, streaming. Higher subscription prices helped pump up that unit's revenue by 12% to $5.5 billion. But it still booked an operating loss of $659 million during the quarter.
Source Fool.com
