US entertainment giant Disney said Wednesday its flagship streaming service grew slower than expected in the recently ended quarter as pandemic headwinds have begun to bite.  

Disney+ has reached 118 million subscribers worldwide, but analysts had predicted millions more would sign up, resulting in a miss that saw the entertainment giant's share price slip in after-market trades.

Disney Company chief executive Bob Chapek told analysts on an earnings call that the two-year-old service has faced some pandemic headwinds to landing new shows and films.

"Obviously, we are only in year two of the Disney+ launch and the hunger for content for the service is extraordinary," he said.

"And when you have that happen at the same time that you have a pandemic and you have to shut down production, that is not a good combination," he added.

Rival Netflix has promised to significantly bolster its lineup of original programing after suffering from pandemic-caused production delays.

Disappointing growth at Disney+ came as the company tried to regain momentum in its travel and theme park businesses, which have suffered due to the pandemic.

"We've made great strides in reopening our businesses while taking meaningful and innovative steps in Direct-to-Consumer and at our Parks, particularly with our popular new Disney Genie and Magic Key offerings," Chapek explained.

Disney also planned a major promotion on Friday to mark the two-year anniversary this week of the launch of Disney+.

More worrisome for investors, the average monthly revenue per Disney+ subscriber fell 9 percent year-over-year to $4.12. 

In its earnings release, the group attributed the decline to cheaper subscriptions in some markets, such as India and Indonesia. 

It also noted that Disney+ is facing cost increases in terms of content production, marketing and technology.

Disney stock fell 4 percent by close of trading Wednesday.

In all, Disney's platforms (Disney+, ESPN+ and Hulu) have 179 million subscriptions and have generated a turnover of $4.6 billion.  

"We continue to be impacted by reduced operating capacities" due to health restrictions, Disney noted in its statement.

Disney also expected costs of making films and operating its other business to rise, given inflationary pressures being felt across the economy.