8/11/2022: Disney Had a Great Quarter

Q2 2022 earnings beat on revenue, EPS and streaming subscriber growth.

Disney reported a better-than-expected 26% jump in revenue for the quarter ending June 30, 2022, driven by record results at its theme parks division and better than expected subscriber growth to its flagship streaming video platform Disney+. Revenue was $21.5B vs $21B expected. EPS was $1.09 vs $0.96 expected. Disney+ gained 14.4 million new subscribers, beating the expectation of 10 million new subscribers added. Parks, experience and consumer products revenue is $7.39 billion versus $6.65 billion expected. Disney’s total subscriber base is now 221.1 million customers across all of its streaming offerings, including ESPN+ and Hulu, surpassing Netflix’s 220.67 million subscribers.

As a new DIS 0.00 shareholder, I couldn’t ask for a better earnings report. I have always been a fan of Disney. I have some odd tastes but I have watched Mary Poppins and Moana too many times and never get tired of it. Their stock price has always been a bit expensive. As a very value conscious investor, I never bought their stock until about two months ago at $94, which was roughly a 50% discount from the all-time high. It was a bit gut wrenching to do it but I am so glad that I bought the drip. There are a lot of legitimate concerns regarding Disney’s business such as 1) recession and increasing labor costs can hurt parks business, 2) the streaming business is losing billions , 3) new CEO doesn’t seem as good as Bob Iger. But Disney got an incredible moat which is the massive amount of content libraries they built in the past century and the consumer recognition and loyalty. They have to keep up with the times so moving to streaming or changing CEOs makes a lot of sense. I am pretty confident that Disney would still be around in 100 years but I couldn’t say the same for Meta or Visa. DIS 0.00 is a stock I will pass down to my children.

It was very interesting that we do occasionally see great companies trading at fair prices. It’s very hard to overcome the fear of buying these stocks when the market sentiment is super negative because it’s incredibly challenging to know if a company is actually great and the price is fair. I believe DIS 0.00 at $94 was a good catch but I am not too optimistic that I can find many opportunities down the road. If I do, I will share it here.