December 11, 2023

The Disney+ logo is displayed on a TV screen in Paris, December 26, 2019.

Chenault | Getty Images

disney Shares of the company fell about 9% on Thursday after the company reported a loss of Disney+ subscribers in its most recent quarter.

company, of which Announced profit and revenue In a period in line with Wall Street estimates, the company reported losing 4 million Disney+ subscribers. The decline was more than offset by higher prices, which reduced the streaming segment’s operating loss by $400 million in the fiscal second quarter.

Still, Wall Street was spooked by an unexpected subscriber loss after expecting Disney+ to add more than 1 million subscribers, according to StreetAccount.

The company’s stock was trading at about $92 a share on Thursday. The stock was up more than 16% year-to-date as of Wednesday’s close.

The drop would wipe about $15 billion off the company’s market value.

stock chart iconstock chart icon

hidden content

Disney shares fell on Thursday after the release of its fiscal second-quarter earnings.

Disney faces headwinds from reduced ad budget, fierce streaming competition netflix New ad tiers and continued economic uncertainty, according to a report by Paul Verna, principal analyst at research firm Insider Intelligence.

“While Disney has managed to stem the loss of streaming revenue, it has done so primarily by raising prices, a strategy that is not sustainable in the long run,” Werner wrote. “Disney plans to raise prices again later this year, but will soon run out of room to raise prices further.”

Analysts at SVB MoffettNathanson lowered their price target on the stock by $3 to $127 after the report, but maintained an Outperform rating on the company. The company expects total subscriptions to be roughly flat in the fiscal third quarter and to rise in the fourth quarter.

Tim Noren, senior media technology analyst at Macquarie, also maintained his Outperform rating, noting that Disney “has the necessary assets to successfully transition to streaming, but it’s a multifaceted endeavor.”

“Disney has made progress in cost savings and operational efficiencies amid a deteriorating structural and cyclical linear TV business,” Noren wrote in the report.

Disney Chief Executive Bob Iger is overseeing a broad restructuring of the company, including layoffs of about 7,000 jobs, which is scheduled to be completed by the summer.

The company also said Wednesday that it will add Hulu content to its Disney+ streaming app, while it expects to increase the price of its ad-free streaming service later this year.

Share of other streaming services warner bros found and paramount They also fell on Thursday, down about 4% each. Netflix Shares were little changed.