Disney executives tout strong results on second-quarter earnings call, stay silent on Florida dispute

Disney executives touted strong subscriber growth for streaming platform Disney+ and a strong pickup in attendance at the company’s US parks in an earnings call on Wednesday.

It was an ongoing feud with Florida, notably absent from the conversation, whose legislature dissolved the special government at Walt Disney World known as the Reddy Creek Improvement District last month.

Analysts have instead focused on how inflationary pressures are affecting Disney’s business, whether the loss of Netflix subscribers predicts the fate of Disney+, and how China’s COVID-free strategy is affecting theme parks in Asia.

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Disney added 7.9 million Disney+ subscribers in the second quarter, which CEO Bob Chuckle said puts the company on track to reach its goal of 230 to 260 million subscribers by 2024.

“The platform’s growth since its launch reinforces its unique nature,” Chubbak said during an earnings call on Wednesday. Quite simply, we believe Disney plus is a unique service, based on exceptional brand content.

Netflix announced last month that it lost about 200,000 subscribers in the first quarter, unnerving investors and contributing to a 72% drop in the streaming giant’s shares so far this year.

Inflation, which rose by 8.3% in April, was also on top of investors’ minds,

“It is very difficult to accurately predict the potential financial impact due to the liquidity of the situation,” Disney CFO Kristen McCarthy said on Wednesday’s earnings call. “But you can be confident that we are fully aware of that and are working hard to relieve any pressure on the margins.”

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McCarthy said the shutdown at Disney theme parks in China, which is dealing with the largest outbreak of COVID-19 since the pandemic began, could negatively impact revenue by as much as $350 million in the third quarter versus 2021.

These 2016 file photos show Shanghai Disneyland Park 5 days before the official opening in Shanghai, China. (Marcio Machado/Getty Images/Getty Images)

Despite this, attendance at local parks rebounded, resulting in $6.65 billion in park revenue.

“Obviously we are very pleased with our operations local parks and how they have come back with such strength,” Chuck said.

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It remains to be seen how the row between Disney and Florida Governor Ron DeSantis will end.

Disney originally criticized the Florida Parents’ Rights to Education bill, which would ban lessons about sexual orientation and gender identity in kindergarten through third grade, when it was first passed in March.

Ron DeSantis, Florida Governor, speaks during the annual leadership meeting of the Republican Jewish Coalition (RJC) in Las Vegas, Nevada, United States, on Saturday, November 6, 2021. (Bridget Bennett/Bloomberg via Getty Images/Getty Images)

“Florida’s HB 1557, also known as the Don’t Say Jay Bill, should never have passed and should have been signed into law,” the company said at the time. “Our goal as a company is to have this law repealed by the legislature or invalidated in the courts.”

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After DeSantis signed into law the bill last month dissolving Disney’s own government, a group of Florida citizens challenged the law in court, but a judge dismissed the suit on Tuesday.

Disney shares closed down 2.29% on Wednesday.