Summary
- Disney’s latest earnings report surprised a lot of analysts as it missed expectations despite record-breaking box office results.
- The reason for the miss largely ties back to Disney’s acquisition of Fox and costs associated with its growing streaming strategy.
- While Disney’s summer slate was strong, Fox’s imploded proving to be a drain on their new parent company, however, that should be temporary as its future development slate is strong.
- Disney’s streaming service may have high startup costs but the company made a bold statement this week by bundling it with ESPN+ and an ad-supported version of Hulu.
- Disney despite this setback is still poised to be the most successful of all the new OTT services coming in the next year.
(Image Credit: Disney)
Even the world’s mightiest superheroes can’t beat the stock market sometimes.
Disney’s (NYSE:DIS) latest earnings report this week definitely put a damper on the box office party the House of Mouse has been having this summer, but ultimately, I’m not convinced it will make a long-term difference. However the earnings were interesting for a couple of reasons beyond the up/down nature and investors should be looking at more than just the numbers.
First, we need to look at the elephant – or the fox – in the room.
Specifically, Disney’s takeover of what was Fox.
It stands to reason there would be growing pains and it just so happened to hit hard at an unexpected time. If you follow the box office at all you’ve likely seen Fox’s slate this year has underwhelmed... and that’s probably being nice.
Alita: Battle Angel and X-Men installment Dark Phoenix were big misses. Combined the two were produced for $520 million and domestically made around $150 million total. At least Battle Angel was able to earn back its money with international audiences, but regardless this movie was made to be a franchise and US audiences rejected it flat out. With Phoenix, how a movie can still be greenlit for $350 million staggers my imagination and globally it stalled a few million shy of the $250 mark.
