Disney Turns a Corner in Streaming, but Market Is Unimpressed

You can just imagine what Disney CEO Bob Iger was thinking today: If it’s not one thing, it’s another. Disney surprised the market by reporting that its streaming services all but broke even in the March quarter, a notable achievement given that it was wallowing in red ink just a few quarters ago. But the pesky worrywarts of the stock market chose to worry about Disney’s forecast of a slowdown in its theme park business in the June quarter. Disney stock dropped 9%, its lowest point since early February, before Disney’s publicity campaign aimed at fighting activist investors sparked a rally. Hopefully Nelson Peltz, who waged a losing battle for board seats, sold his stock at a high. Otherwise he may start a new campaign! 

To be sure, the market is right to fret (the market is always right, isn’t it?). For one thing, theme parks have kept Disney healthy the past couple of years, as it was suffocating from streaming losses and the slow death of cable TV. And now, while Iger may have plugged the red ink flowing out of streaming, the TV networks’ business deteriorated markedly in the quarter. That makes any slowdown in theme parks less than ideal.