A top-line revenue miss and stalling Disney+ subscriber growth has sent the Disney share price tumbling 3.75% in after-hours trading.
The entertainment giant reported its first-quarter earnings after the bell last night.
Adjusted EPS $0.79 vs. estimate $0.32
Revenue $15.61 Billion vs. estimate $15.85
Disney+ subscribers 103.6 Million vs. estimate of 110.3 Million
Whilst the bottom-line earnings per share increased, the Disney share price clearly reacted to the revenue and subscriber data.
Disney, up until last night, had managed to make the most of a challenging trading environment over the last 15 months. Obviously, the company has taken a hit at its theme park division but has more than offset that with the introduction of its Disney+ streaming service.
The success of the ‘Netflix killer’ had helped the Disney share price achieve a new all-time high of $203.00 earlier this year. The stock had risen over +150% from its pandemic low of $79.07 at the March peak.
User growth Stalls
The subscriber numbers for Disney+ missed analysts’ consensus estimates by close to 7 million users. This more than offset the positive EPS and was the catalyst for the Disney share price to lose -3.75% in a sharp decline to $169.37.
The price did recover marginally to $171.25, but the technicals have now left the stock open to more losses when trading resumes today.
On the 4-hour chart we can see that the price has broken below the support of a descending channel at $176.
The trend line, in place from the 8th of February low at $188.50 had be3en agood area of support.
The breach of this level now points to horizontal support at $161.85. This trend links the 10th of December high and the 27th of January low.
The last time the market touched this line, the Disney share price bounced 26% to its March high. Therefore I consider this an important threshold.
A close back above the descending trendline at $176.00 would negate the immediate bearish outlook and could see the market trade higher to the resistance of a descending trendline at $186.50