Disney's strong streaming growth dispels Netflix gloom

© Reuters. FILE PHOTO: Toy figures of people are seen in front of the displayed Disney + logo, in this illustration taken January 20, 2022. REUTERS/Dado Ruvic/Illustration

By Lisa Richwine and Eva Mathews

(Reuters) -Walt Disney Co eased concerns about streaming video by picking up 7.9 million new Disney+ customers from January through March, sending shares of the entertainment giant up 3% in after-hours trading on Wednesday.

The company reported adjusted earnings per share of $1.08, below analyst forecasts of $1.19, according to IBES data from Refinitiv, impacted by an increase in the effective tax rate on foreign earnings.

Despite the miss, investors who have questioned the future of streaming after Netflix Inc (NASDAQ:NFLX) lost subscribers, boosted Disney's shares by 3.5% to $108.70. Wall Street had been expecting 5.3 million new Disney+ customers.

Revenue came in at $19.2 billion, below the $20.03 billion consensus estimate. The company spent $1 billion during the quarter to buy back rights to Disney programming to use for its own streaming services.

The world's largest entertainment company has staked its future on building a streaming TV business to rival Netflix, the company that drew mass audiences to subscription video.

Netflix unnerved Wall Street last month when the company disclosed it lost subscribers in the first three months of 2022 and forecast more defections through June.

The Netflix results hit media stocks and prompted investors to re-evaluate their expectations for online video.

Total subscriptions for Disney+, launched in November 2019, reached 137.7 million, with help from new releases including Marvel's "Moon Knight" series and Pixar movie "Turning Red."

Disney's theme park business continued a strong rebound after extended pandemic-related closures and attendance restrictions.

Operating income at the parks unit totaled $3.7 billion, a 50% increase from a year earlier.