Disney Helps Cushion Blow to Media, Communication Services ETFs

Disney (NYSE: DIS) helped support media and communication services-related exchange traded funds after posting better-than-expected fourth-quarter results and fueling optimism over its foray into online streaming.

On Thursday, the Roundhill Streaming Services & Technology ETF (NYSE ARCA: SUBZ) was down 0.4%, Invesco Dynamic Media ETF (PBS) fell 1.1%, and iShares Evolved U.S. Media and Entertainment ETF (IEME) was flat.

Additionally, the Communication Services Select Sector SPDR Fund (NYSEArca: XLC) decreased 1.2%, the Vanguard Communication Services (NYSEArca: VOX) fell 1.1%, and the Fidelity MSCI Communication Services ETF (NYSEArca: FCOM) dropped 1.1%.

Meanwhile, Disney shares advanced 3.9%. DIS makes up 6.1% of SUBZ’s underlying portfolio, 5.1% of PBS, 4.7% of IEME, 5.9% of FCOM, 5.7% of VOX, and 4.6% of XLC.

The Wall Street Journal reports that Walt Disney Co. enjoyed increased subscription growth for its flagship Disney+ streaming service and revealed record income from its theme parks and resorts, indicating that the worst of the coronavirus pandemic may be over.

“These results speak volumes for Disney’s storied brands and its ability to rise above the competition in an increasingly crowded digital media market,” media analyst Paul Verna with Insider Intelligence told the WSJ.

Figures To Beat

Specifically, Disney showed 11.8 million new Disney+ subscribers with a total of 129.8 million subscribers at the end of the last quarter, compared to 118.1 million subscribers in the third quarter. According to FactSet, the figures beat analysts” expectations that the platform would see fewer than seven million new subscribers.

The company also added 41 million new international subscribers, excluding Disney+ Hotstar, or 40% more from the same period year-over-year.

“We are more confident than ever in this platform,” Chief Executive Bob Chapek said of Disney+ in an earnings call with investors.

“We are not nearly tapped out in each of our major franchises,” Chapek said, adding that the biggest opportunity for growth in streaming is in general entertainment series, including titles like “Black-ish,” “Grown-ish,” and “The Wonder Years.”

In addition, Disney reported $21.82 billion in revenue, compared to the $16.25 billion a year earlier, and analyst expectations for revenue of $20.27 billion.

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