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What’s happening: Shares of The Walt Disney Company fell on Thursday, after the company released results for its second quarter.
What happened: The Burbank, California-based company posted better-than-expected sales for the latest quarter on the strong performance of its theme parks.
However, Disney reported a decline in one of the major metrics, which exerted pressure on the stock.
How were the results: The media giant reported double-digit growth in sales for the quarter ended April 1.
Why it matters: Disney reported growth in its theme parks business, with higher visitors at Shanghai Disney Resort, Hong Kong Disneyland Resort and Disneyland Paris resulting in 23% growth in operating income for the segment.
Revenues for the Media & Entertainment segment rose 3% year-over-year to $14.04 billion, while revenues at the Parks, Experiences and Product division surged 17% to $7.78 billion.
Investors grew concerned when Disney+ recorded a decline in subscribers by 4 million to 157.8 million. Disney+Hotstar, the service catering to Indian and southeast Asian viewers, lost 4.6 million paid viewers last quarter, taking its subscriber count down by 8% to 52.9 million after losing the rights to the Indian Premier League cricketing tournament.
Disney also lost 300,000 customers in the US and Canada after raising prices last December.
Average revenue per Disney+ subscriber rose 13% year-over-year to $4.44. Its ESPN+ subscribers rose 2%, while Hulu subscribers remained flat.
Disney’s streaming unit ended the quarter with an operating loss of $659 million, versus a year-ago loss of $1.1 billion.
Disney said it expects to take impairment charges of $1.5 billion to $1.8 billion related to removing content from its streaming services.
How shares responded: Disney’s shares fell 8.7% to close at $92.31 on Thursday, following the release of quarterly results. The stock has lost around 6% over the past month.
What to watch: Markets will continue monitoring the company’s streaming business, with Disney looking to combine the Disney+ and Hulu general entertainment service to increase its overall subscriber count.
Context: Equity markets in Europe closed mixed on Thursday as investors monitored inflation data from the US and the UK’s interest rate decision.
Details: The Bank of England announced a rate hike for the 12th consecutive meeting, taking the benchmark interest rates up 25 bps to 4.5% at its latest meeting. The move by the UK central bank was widely expected, with the country still facing soaring inflation.
US data released Wednesday showed consumer price inflation at 4.9% in April, below market expectations of 5%. Producer prices for final demand, the Federal Reserve’s preferred inflation gauge, rose 0.2% last month, versus a 0.4% decline a month ago.
The STOXX Europe 600 Index settled almost flat at 463.62 on Thursday, with mining stocks recording the biggest losses and household goods stocks recording gains of around 1%.
London’s FTSE 100 fell 0.14% to close at 7,730.58 on Thursday, while Germany’s DAX 40 was down 0.39% and France’s CAC 40 added 0.28%.
What are expectations: Investors await the release of some major economic reports from the European countries. Spain and France will release data on inflation rate. Germany’s current account report is scheduled for release on Friday.
France’s annual inflation rate is expected to accelerate to 5.9% in April, from 5.7% in March, while Spain’s annual consumer price inflation is projected to rise to 4.1% in April, from 3.3% in the previous month.
Other Markets: US trading indices closed mixed on Thursday, with the Dow Jones index and S&P 500 down by 0.66% and 0.17%, respectively, and the Nasdaq 100 up by 0.31%.
UK’s defence secretary, Ben Wallace, said the country is sending long-range Storm Shadow missiles to Ukraine. The news sent the safe-haven US dollar index slightly lower this morning.
New Zealand’s BusinessNZ Performance of Manufacturing Index rose to 49.1 in April, from 48.1 in the previous month. However, factory activity remaining in the contraction zone exerted pressure on the NZD/USD forex pair.
Peru’s central bank maintained its reference interest rate at 7.75% in its May meeting, which sent the PEN/USD pair lower in forex trading this morning.
US initial jobless claims rose by 22,000 to 264,000 in the latest week. This being the steepest rise since October 2021 sent the Dow Jones index lower by more than 200 points on Thursday.
South Africa’s manufacturing production fell 1.1% year-over-year in March. However, this was better than market expectations of a 6.1% decline, which sent the ZAR/USD pair higher in forex trading this morning.
UK’s GDP growth, manufacturing production, goods trade balance, industrial production, construction output, balance of trade and business investment, Turkey’s retail sales, India’s foreign exchange reserves, manufacturing production, industrial production, consumer inflation and total passenger vehicle sales, Brazil’s inflation rate and industrial entrepreneur confidence index, Mexico’s industrial production, US import prices, export prices, University of Michigan consumer sentiment and Baker Hughes crude oil rigs, Russia’s inflation rate, China’s foreign direct investment and current account, Spain’s consumer confidence indicator, as well as Argentina’s inflation.
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