DIS: Disney Stock Wipes Out 10% Despite First Profit in Core Streaming Business. Here’s Why.

Flat subscriber growth projections for current quarter and an overall March-quarter loss put a lid on optimism.

• Disney stock DIS plunged roughly 10% on Tuesday as investors reacted to a nuanced yet disappointing earnings figures. The streaming giant revealed March-quarter financials (second fiscal quarter), showing the company’s flagship streaming business — Disney+ and Hulu — turned a profit for the first time ever. The two platforms whipped up operating income of $47 million, compared with a $587 million loss last year.
• Overall, the company’s streaming service lost $18 million, which was way better than last-year’s quarterly loss of $659 million. To this end, chief executive Bob Iger said Disney was on track to achieve streaming profitability by the end of the September quarter. Paid core subscribers to Disney+ in the quarter were 117.6 million, coming above expectations.
• Revenue arrived at $22.08 billion, slightly below the $22.11 billion expected. Disney Experiences, the theme parks division, brought in $8.4 billion with operating income at $2.3 billion. Wall Street, however, expected more and this sparked fears of a slowdown in growth. The company predicted no user growth at Disney+ for the current quarter.