Disney Shares Slump 8.5% After Announcing 4 Million Subscriber Loss, Plans to Remove Content

thewrap.com:

“certain content” from its streaming platforms as a cost-cutting effort, and said it would be producing “lower volumes of content.”Disney stock fell $8.94, or 8.8%, to $92.20, with nearly three times the number of shares traded in the first hour as in a typical full-day session.

It saw by far the largest decline of the 30 stocks in the Dow Jones Industrial Average amid a broad market slump that saw the index fall 1.1%.Disney stock hit an annual low $84.07 in December, and ended Wednesday’s session up 13.7% since the start of the year.After the markets closed Wednesday, the House of Mouse reported net income of $1.27 billion and adjusted earnings per share of 93 cents, topping Wall Street’s expectations for 89 cents per share.

Revenue for the quarter rose 13% year over year to $21.82 billion.While the company said its average monthly revenue per user leaped 20% in the first three months of 2023, thanks to its move to raise prices in December, it also announced that shed 4 million subscribers, a 4% drop during the period.

While lower marketing costs and the ARPU increase helped narrow Disney’s streaming losses, the subscriber figure fell well short of the 162.5 million Wall Street analysts had forecast.Deutsche Bank analyst Bryan Kraft lowered the firm’s price target on Disney to $131 from $135, keeping a “Buy” rating on the shares, according to TheFly.com The analyst also lowered his 2023 and 2024 estimates, but in a note to clients said he views the stock selloff as a buying opportunity.