Disney CEO predicts lower Q4 subscriber growth than expected, shares fall

Disney CEO Bob Chapek said Tuesday that his company's streaming service growth had "hit some headwinds" due to coronavirus, prompting shares to fall for the day.

According to Chapek, Disney plans to gain “low single-digit millions” of streaming customers in the fourth quarter. Following Chapek's remarks at the virtual Goldman Sachs Communacopia Conference, Disney shares fell 4.17 percent.

Chapek said that “mobilizing partners” in Latin America to push Disney's new Star+ streaming service, the Covid-related suspension of the India Premier League, whose games show on Disney's Hotstar, and production delays from the delta version all affected fourth-quarter subscriber counts.

“We are going to see a little bit more noise than maybe the Street projects quarter to quarter,” Chapek said. “The resurgence of Covid and delta did impact some of our productions,” CNBC reported. 

Chapek's projection is much lower than that of several analysts.

Global manufacturing disruptions will be “very short term,” said Chapek. However, he admitted that there won't be as much new content in the fourth quarter "than we might have expected," which will have an impact on subscriber growth.

By 2024, Disney expects to have 230 million to 260 million Disney+ members. In August, Disney announced that it had 116 million Disney+ subscribers.

Chapek warned investors that quarter-to-quarter growth is “not linear” and that some choppy growth is to be expected. Nonetheless, he remains optimistic about Disney's long-term growth prospects.

Source: CNBC