Disney smashes streaming subscriber expectations, boosting segments hurt by Covid

Disney is set to report earnings for the first quarter of 2021 after the bell on Thursday.

Here are the key numbers:

• Loss per share: 41 cents expected, according to a Refinitiv survey on analysts
• Revenue: $15.9 billion expected, according to Refinitiv

The coronavirus pandemic continues to take a toll on Disney’s parks business. But a glimmer of hope came earlier this week when an executive told workers in California it would begin to offer a “limited-time ticketed experience” in March, “Good Morning America” reported. The letter said Disney would bring back 1,000 Disneyland Resort cast members to staff the park.

Disney and other California-based parks like Universal Studios had pushed back on the state’s strict rules that required them to remain closed for many months due to high coronavirus cases in their counties. Disney CEO Bob Chapek told analysts during the company’s Q4 earnings call that he was “extremely disappointed” in California’s decision to keep parks closed. He said Disney had instituted science-based safety protocols and has been backed by the labor unions representing staff.

These prolonged closures coupled with limited capacity restrictions at its open parks has forced the company to slim down its workforce.

“We believe state leadership should look objectively at what we’ve achieved successfully at our Parks around the world, all based on science, as opposed to setting an arbitrary standard that is precluding our cast members from getting back to work,” Chapek said on the November call.

At the same time, Disney’s new streaming service, Disney+, has taken off during the pandemic and offered the company creative ways to release films directly to audiences during restrictions on theatres and gathering.

During an investor presentation in December, Disney announced it had nearly 87 million subscribers on the platform, blowing past its initial goal of racking up at least 60 million subscriptions by 2024. That’s still just a fraction of Netflix’s more than 200 million paid global subscribers, but shows strong growth for the first year of its service.

Disney also updated its forecast for Disney+ at the December presentation, saying it will have 230 million to 260 million subscribers by 2024. 

Disney used the service to stream its live action remake of “Mulan” last year for an additional fee, but did not disclose performance metrics for that release. The company also released its Pixar film “Soul” on the service in December, but made it free to anyone who had already paid for the service.

In the studio entertainment segment, Disney will be facing tough comparisons. Last year during the first quarter, the company saw revenues from its theatrical releases reach $3.76 billion on the backs of strong performances from “Frozen II” and “Star Wars: The Rise of Skywalker.”

Disney did not have any new theatrical releases in October, November or December of 2020. Instead, it rereleased a number of legacy titles like “Star Wars” and “Hocus Pocus” while movie theaters struggled to lure in audiences.

Last week Disney earned 25 Golden Globe nominations, including 10 for programming on Hulu and four nominations for its Searchlight Pictures feature “Nomadland.”

This is the first year that Disney+ content has been nominated since its 2019 launch. “Hamilton,” “Soul” and “The Mandalorian” received nods ahead of the Feb. 28 awards show.

This story is developing. Check back for updates.

Disclosure: NBCUniversal is the parent company of Universal Studios and CNBC.

Subscribe to CNBC on YouTube.

WATCH: What will happen to your favorite shows?