Today The Walt Disney Company reported their Q3 FY22 Earning for the months between April, May, and June of this year. At the time of publishing, Disney stock is up almost $7.00 per share in after-hours trading. The company is reporting revenues of $21.5 billion versus $21 billion expected and adjusted earnings per share (EPS) of $1.09 versus $0.96 expected.

In addition, the company says Disney+, their streaming service, added an additional 14.4 million subscribers versus an expected 10 million from analysts. With these numbers, Disney has beaten Netflix in total subscribers. This is the first time any streaming company has passed Netflix in total subscriptions. Disney stated that they will spend $30 billion on content this year.

The company also announced, that starting December 8, they were adding an ad-supported paid tier to Disney+, as well as Hulu + Live TV will introduce a new basic (with ads) plan for $69.99 a month. Yahoo! Finance reports that the price of Hulu’s ad-free service will rise by $2 a month to $14.99 beginning October 10th. Hulu with ads will go up by $1 to $7.99 a month.

“The company lowered its long-term subscriber forecast for Disney+ customers on Wednesday, blaming the loss of cricket rights in India,” according to Reuters.

Previously Disney was projecting between 230 million to 260 million subscribers by the end of September 2024. Today, they adjusted those numbers to between 215 million and 245 million total Disney+ customers.

The adjustment is due to Disney recently losing the streaming rights for Indian Premier League cricket matches. “We chose not to proceed with the digital rights given the price required to secure that package,” said Rebecca Campbell, chairman, international content and operations at Disney. “We made disciplined bids with a focus on long-term value.”

During the call, Chief Financial Officer Christine McCarthy said they were also, for the first time, breaking out estimates for Disney+ Hotstar customers in India from the rest of Disney+.

“The company still expects its streaming TV unit to turn a profit in fiscal 2024,” McCarthy said. Reuters reports, “In the most recent quarter, the division lost $1.1 billion.”

“We had an excellent quarter, with our world-class creative and business teams powering outstanding performance at our domestic theme parks, big increases in live-sports viewership, and significant subscriber growth at our streaming services. With 14.4 million Disney+ subscribers added in the fiscal third quarter, we now have 221 million total subscriptions across our streaming offerings,” said Bob Chapek, Chief Executive Officer, The Walt Disney Company. “We continue to transform entertainment as we near our second century, with compelling new storytelling across our many platforms and unique immersive physical experiences that exceed guest expectations, all of which are reflected in our strong operating results this quarter.”

Overall, Disney Parks and Resorts did exceptionally well this quarter. Disney Parks, Experiences and Products revenues for the quarter increased to $7.4 billion compared to $4.3 billion in the prior-year quarter. Segment operating income increased from $1.8 billion to $2.2 billion compared to $0.4 billion in the prior-year quarter. Bob Chapek said that 50% of all guests visiting Walt Disney World purchased Disney Genie+, their virtual planning tool that includes the paid FastPass program. Previously, Chapek said that one-third of all guests utilized the program and that only during the holidays did that increase to half of all guests.

The company reported that per capita spending was up by 10% at the domestic parks and they are currently experiencing a 90% occupancy rate at their hotel resorts.

Although the company is reporting better-than-expected results in the parks division, Wall Street is keeping an eye on those numbers in the next few months to see if they are affected by inflation. According to the New York Times, economists have used Disney theme parks as “informal barometers of consumer confidence.”

“Disney still faces economic uncertainty and intense competition,” Paul Verna, principal analyst at Insider Intelligence, a research firm, said in an email, “but its quarterly performance should at least temporarily put to rest some of Wall Street’s gloomier perceptions about the company and, more broadly, about the entertainment industry.”

“Disney’s parks, experience and consumer products segment continued to thrive amid a surge in spring travel,” reports Yahoo! Finance. “Particularly among international travelers. Operating income for the segment hit $2.19 billion, representing a year-over-year increase of well over 100%.”

Disneyland Paris also saw a dramatic increase in attendance and revenues. This offset reported losses from the Shanghai Disney Resort, which has only recently opened from being closed for most of the quarter due to another pandemic-related shutdown.

“Operating income growth at our domestic parks and experiences was due to higher volumes and increased guest spending, partially offset by higher costs. Higher volumes were due to increases in attendance, occupied room nights and cruise ship sailings,” stated the company press release. “Cruise ships were operating during the entire current quarter while sailings were suspended in the prior-year quarter. Guest spending growth was due to an increase in average per capita ticket revenue and higher average daily hotel room rates. The increase in average per capita ticket revenue was due to the introduction of Genie+ and Lightning Lane in the first quarter of the current fiscal year and a reduced impact from promotions at Walt Disney World Resort, partially offset by an unfavorable attendance mix at Disneyland Resort. Higher costs were primarily due to volume growth, cost inflation and new guest offerings. Our domestic parks and resorts were open for the entire current quarter, whereas Disneyland Resort was open for 65 days of the prior-year quarter, and Walt Disney World Resort operated at reduced capacity in the prior-year quarter.”

The “unfavorable attendance mix at Disneyland Resort” is more than likely coming from the suspension of sales of Disneyland’s Magic Key annual passes. The company is currently waiting to hear about a pending class-action suit from Jenale Nielsen who stated that Disney misled and deceived its most loyal fans by artificially limiting capacity and restricting reservations” at Disneyland Park. They are claiming that the Magic Key Program has “no blockout dates” and yet, they were denied being able to go whenever they wanted because of a lack of available reservations.

Improved results at our international parks and resorts were primarily due to growth at Disneyland Paris, partially offset by a decrease at Shanghai Disney Resort. Higher operating results at Disneyland Paris were due to increases in attendance and occupied room nights, partially offset by higher operating costs due to volume growth. Disneyland Paris was open for the entire current quarter compared to 19 days in the prior-year quarter. The decrease at Shanghai Disney Resort was due to the park being open for all of the prior-year quarter but only for 3 days in the current quarter.”

Next year, The Walt Disney Company will be celebrating its 100th anniversary.