The company, which posted profit and revenue for the period that were in line with Wall Street estimates, reported a loss of four million Disney+ subscribers. That downtick was offset by price increases, which led to a narrowing of operating losses at the streaming unit by $400 million for the fiscal second quarter.
Still, Wall Street expected a gain of more than one million Disney+ subscribers, according to StreetAccount, and the surprise subscriber loss spooked the Street.
Shares of the company closed at around $92 per share Thursday. The stock is now up over 6% for the year year.
Disney will face headwinds from reductions in ad budget, intense streaming competition with Netflix’s new ad tier and continued economic uncertainty, according to a note from Paul Verna, principal analyst at research firm Insider Intelligence.