Disney shares tumble more than 4%, CEO expects Q4 subscriber growth to slow

Disney CEO Bob Chapek said on Tuesday that the growth of the company’s streaming media service Disney+ has encountered some resistance related to the new crown virus, causing the company’s stock price to fall by more than 4% that day.

Chapek said that Disney expects to add low single-digit millions of streaming media users in the fourth quarter. After the remarks were released, Disney’s stock price plunged rapidly during the intraday session and closed down 4.17% on Tuesday to $171.17.

Chapek said that factors such as the suspension of the Indian Premier League related to the epidemic (its game was broadcast on Disney’s Hotstar) and the production delay caused by the delta variant have affected the growth of subscribers in the fourth fiscal quarter.

Chapek said: We will see more noise than Wall Street expected. The COVID-19 pandemic and delta variants did affect some of our productions. Chapek’s forecast is substantially lower than some analysts’ estimates. Deutsche Bank analyst Bryan Kraft had predicted that Disney+ will add about 13 million users in the fourth quarter.

Chapek said global production delays will be very short-term. But he admitted that there will not be as many new programs as expected in the fourth quarter, which will affect the growth of subscribers. Disney predicts that by 2024, Disney+ subscribers will reach 230-260 million.

Disney said in August that it has 116 million Disney+ subscribers. Chapek cautioned investors that quarterly growth is “not linear” and some volatility is expected. Nevertheless, he is still confident about Disney’s long-term growth prospects.

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