Written by Brenda Nakalema

Disney, Roku, and Other Streaming Stocks Sky-Rocket After Netflix’s Earnings

Walt Disney (ticker: DIS) and shares of other streaming-video companies climbed after Netflix (ticker: NFLX) announced that it lost 970,000 …

Walt Disney (ticker: DIS) and shares of other streaming-video companies climbed after Netflix (ticker: NFLX) announced that it lost 970,000 global subscribers in its second quarter, less than its expected loss of 2 million.

Netflix also announced that it expects to increase its subscriber numbers by 1 million in the third quarter. Disney (ticker: DIS) gained 4.2% on Wednesday,

Warner Bros. Discovery (ticker: WBD) climbed 1.6%, Roku (ticker: ROKU) jumped 8%. In addition, Paramount Global (ticker: PARA) increased by 2.4%, and fuboTV (ticker: FUBO) gained by 8.9%.

Netflix shocked the market when it announced its loss of nearly 200,000 net subscribers, which triggered a panicked stock sell-off. Netflix shares increased by 3.3%, landing at $208.23. By Wednesday’s pre-market trading, the stock had tumbled over 66% this year, largely owing to the drastic drop in subscribers and slowing growth in the first quarter.

The company reported second-quarter earnings of $3.20 a share, smashing analysts’ estimates. Sales in the quarter were $7.97 billion, an 8.6% increase from the previous year but below the Wall Street consensus of $8.05 billion, a figure below estimates of $8.08 billion.

Netflix also announced its plans to launch an ad-supported subscription tier early next year. Although Wall Street applauded the results released by the company, analysts at KeyBanc remained stoic in their assessment, saying they “see more questions than answers in Netflix’s 2Q report.”

KeyBanc, a company that rates the stock at Sector Weight, noted that the company’s guidance for 19%- 20% operating margins within this year and next year was only owed to the foreign-exchange neutral basis. The analysts further commented they “struggle to see” a near-term return to operating margins that surpass 20%. KeyBanc also said that advertising was making progress but would “skew toward a few markets in 2023.”