DIS Shareholders and Stock Info ONLY

[wabbott]

We will not really know for around 18-24months if all these changes and re-structuring worked. It was not a super positive call. Very much focused on the cost cutting. There is light at the end of the tunnel but we are still very much in the tunnel in terms of the stock showing any promise.

Also zero mention about the dividend. I assume announcing any future spending or that the dividend is a back, is a bad look when you are handing out 5500 pink slips.

It has to be turned around more quickly than that time frame, IMO. Otherwise, Iger will be faced with hostile takeover threats. It has happened before.

Again, IMO.

 

[clarker99]

It has to be turned around more quickly than that time frame, IMO. Otherwise, Iger will be faced with hostile takeover threats. It has happened before.

Again, IMO.

McCarthy said middle of FY24 for a rebound.

Iger will be gone in 18 months based on his own timeline. He is just setting the table for the next CEO.

 

[wabbott]

https://finance.yahoo.com/news/disney-earnings-second-quarter-2023-may-10-200858196.html
https://finance.yahoo.com/news/amer...ndary-investor-134459176.html?.tsrc=fin-notif
Disney earnings miss estimates as streaming losses narrow, parks soar
Alexandra Canal
·Senior Reporter
Wed, May 10, 2023 at 4:08 PM EDT

Disney (DIS) reported quarterly results after the bell on Wednesday that showed earnings per share missed estimates by a penny while streaming losses narrowed as the company continues efforts to slash $5.5 billion in costs this year.
The report was the first since Disney announced its new three-pronged business reorganization — Disney Entertainment, ESPN, and Disney Parks, Experiences and Products — as CEO Bob Iger attempts to streamline the media giant and reset its strategy. The company will begin reporting under the new structure later this year.

Theme parks, particularly international parks, continued to be a strong outperformer with operating income hitting $2.17 billion in the quarter, echoing recent trends at competitors like Comcast's Universal (CMCSA).

Despite Disney+ subscribers missing expectations amid recent price hikes, streaming losses narrowed to $659 million in the second quarter— above consensus estimates of $850 million — from a loss of $887 million in the year-ago period. The company reported a streaming loss of $1.1 billion in Q1 and a $1.5 billion loss in Q4.

"We’re pleased with our accomplishments this quarter, including the improved financial performance of our streaming business, which reflect the strategic changes we’ve been making throughout the company to realign Disney for sustained growth and success," Iger said in the earnings release. "From movies to television, to sports, news, and our theme parks, we continue to deliver for consumers, while establishing a more efficient, coordinated, and streamlined approach to our operations."

The stock dipped immediately following the release, with shares slumping 2% in after-hours trading
Here are Disney's second-quarter results compared with Wall Street's consensus estimates, as compiled by Bloomberg:

• Revenue: $21.82 billion versus $21.82 billion expected
• Adj. earnings per share (EPS): $0.93 versus $0.94 expected
• Total Disney+ subscribers: 157.8 million versus 163.1 million expected
• Disney Parks, Experiences and Products revenue: $7.78 billion versus $7.67 billion expected

Iger, who stepped back into the CEO position in November, has remained hyper-focused on profitability as investors shift focus away from subscriber growth and put more emphasis on margins. The company's direct-to-consumer division, which includes Disney+, Hulu and ESPN+, shed a whopping $4 billion-plus in its fiscal 2022 ended Oct. 1, after it spent an estimated $33 billion on content last year.

Since that time, Iger has worked hard to establish new revenue streams like Disney's recently launched ad-supported tier, in addition to various price increases to help pare losses and lift metrics like average revenue per user, or ARPU.

Domestic ARPU at Disney+ improved 20% sequentially to reach $7.14 in Q2 2022. The company reported domestic ARPU of $5.95 in the prior quarter.


Iger has consistently reaffirmed the company's outlook of reaching streaming profitability by the year 2024, although it will be a bumpy road ahead.

Coupled with profitability concerns, the future of Hulu hangs in the balance after Bob Iger said "everything was on the table" regarding the company's stake in the streamer. Investors will be closely monitoring any additional commentary on the earnings call regarding the future of Hulu and Iger's overall streaming vision.

Advertising also continued to be a headwind, similar to competitors. Linear network revenues fell 7% in the quarter compared to the year-ago period.

On the parks side of the business, operating income beat expectations of $2.14 billion to hit $2.17 billion, higher than Q2 2022's $1.76 billion.

Parks soared to $3.05 billion in Q1 on strong domestic theme park trends. Analysts have remained largely bullish on the parks business despite heightened risks to margins amid inflation.

Earlier this year, Disney announced long-awaited updates to its parks reservation system and annual passholder program following intense backlash from consumers over lengthy wait times and sky-high ticket prices.

 

[clarker99]

Iger talked that Hulu brings amazing value to an all-in-one Disney+ app. The one analyst made the assumption that DIS has made up its mind to take on Hulu and Iger said he did not know how things will play out but he has talked with Comcast. You have to almost think DIS will be on the hook and they have to account for that in the future. Will have to sell a lot of ads to pay for Hulu. Lol.

 

[Jrb1979]

Reading between the lines through this tells me bookings look very soft for next while. Personally I think they should stop wasting so much with D+ and streaming. Use that money to invest in the parks. The place where they are making money.

 

[clarker99]

Reading between the lines through this tells me bookings look very soft for next while. Personally I think they should stop wasting so much with D+ and streaming. Use that money to invest in the parks. The place where they are making money.

There was zero talk about bookings. Wasn’t anything in the call to even hint at that.

 

[Jrb1979]

There was zero talk about bookings. Wasn’t anything in the call to even hint at that.

WDW was down in Q2 and seemingly will be soft in Q3. MK just opened a new “e-ticket” attraction yet it doesn’t seem to be a draw for people.

 

[HokieRaven5]

WDW was down in Q2 and seemingly will be soft in Q3. MK just opened a new “e-ticket” attraction yet it doesn’t seem to be a draw for people.

Q2 ended before Tron opened.

 

[HokieRaven5]

Use that money to invest in the parks. The place where they are making money.

They are, just not at WDW. And indications from that meeting came off like they’re willing to continue that trend while everything with RCID/CFTOD is ongoing.

 

[Jrb1979]

Q2 ended before Tron opened.

I know it did. It obviously isn't drawing for Q3 or there wouldn't be all these discounts offered or APs back on sale.

 

[wabbott]

Here's where it landed at the end of after hours trading. Looks like investors don't much like the idea of curtailing investment in WDW/Florida.

Let's see what happens pre-market tomorrow.

https://finance.yahoo.com/quote/DIS?p=DIS

96.33 -4.81 (-4.76%)
After hours: 07:59PM EDT

 

[HokieRaven5]

There was zero talk about bookings. Wasn’t anything in the call to even hint at that.

“The decrease at Walt Disney World Resort was due to higher costs, partially offset by increased volumes. Higher costs reflected cost inflation, increased expenses associated with new guest offerings and higher depreciation. The increase in volumes was due to attendance growth and higher occupied room nights.”

By their own admission attendance and occupancy was up at WDW, however so were their associated costs which caused the dip.

 

[clarker99]

“The decrease at Walt Disney World Resort was due to higher costs, partially offset by increased volumes. Higher costs reflected cost inflation, increased expenses associated with new guest offerings and higher depreciation. The increase in volumes was due to attendance growth and higher occupied room nights.”

By their own admission attendance and occupancy was up at WDW, however so were their associated costs which caused the dip.

Exactly. Thank you for posting that.

I know it did. It obviously isn't drawing for Q3 or there wouldn't be all these discounts offered or APs back on sale.

This just false. For out of State guests they are showing the same hotel discount as they did in February for the same nights. Nothing expanded.

As has been pointed out to you before, there are always promotions on. Always. This is nothing new.

 

[Jrb1979]

Exactly. Thank you for posting that.

This just false. For out of State guests they are showing the same hotel discount as they did in February for the same nights. Nothing expanded.

As has been pointed out to you before, there are always promotions on. Always. This is nothing new.

Sure room discounts are common. Not dining offers. Question for you. You think they put APs on sale just cause? Do you think bringing back the dining plan and advanced booking for Genie+ are being brought back to please guests?

 

[clarker99]

Sure room discounts are common. Not dining offers. Question for you. You think they put APs on sale just cause? Do you think bringing back the dining plan and advanced booking for Genie+ are being brought back to please guests?

Dining offers were common pre-covid. Literally once a year they offered ‘free dining’. And they haven’t brought that back promo as of yet.

The dining plan went away bc not enough restaurants were open or had enough staff to handle the demand. The dining plans are popular and make Disney money. They are not being brought back till Jan 2024. Not summer/fall 2023 where you claim softness.

Altering Genie+ doesnt mean softness. It will still cost money (and AP’s and locals will cry about fairness and availability like they did with FastPass). This is a move for better customer satisfaction for people staying on Dis property. This isn’t happening till sometime in 2024. Not summer/fall 2023 where you claim softness.

AP’s were always going to come back but I think wanted to get through Spring Break and Easter before adding more passholders in the parks. Lots of restrictions on the local AP’s and Disney still looks to be controlling AP availability.

Again, there was nothing out of this earnings call that points to soft domestic parks demand.

 

[Jrb1979]

Dining offers were common pre-covid. Literally once a year they offered ‘free dining’. And they haven’t brought that back promo as of yet.

The dining plan went away bc not enough restaurants were open or had enough staff to handle the demand. The dining plans are popular and make Disney money. They are not being brought back till Jan 2024. Not summer/fall 2023 where you claim softness.

Altering Genie+ doesnt mean softness. It will still cost money (and AP’s and locals will cry about fairness and availability like they did with FastPass). This is a move for better customer satisfaction for people staying on Dis property. This isn’t happening till sometime in 2024. Not summer/fall 2023 where you claim softness.

AP’s were always going to come back but I think wanted to get through Spring Break and Easter before adding more passholders in the parks. Lots of restrictions on the local AP’s and Disney still looks to be controlling AP availability.

Again, there was nothing out of this earnings call that points to soft domestic parks demand.

They offered free dining when bookings were soft. They did offer dining for this summer/fall. What do you call the offer of dining credits when you book a resort stay?

I'm still of the belief they are doing these changes for 2024 cause the forecast for bookings is not looking strong for next year. Travel in general is going to be down for the next year.

 

[clarker99]

They offered free dining when bookings were soft. They did offer dining for this summer/fall. What do you call the offer of dining credits when you book a resort stay?

I'm still of the belief they are doing these changes for 2024 cause the forecast for bookings is not looking strong for next year. Travel in general is going to be down for the next year.

The dining credit offer was no where near as good as the ‘free dining plan’ and if memory serves were very limited dates.

Len Testa and Jim Hill talked about that dining credits promo on a show and made it sound like they were doing it as a test for a potential alternative to the old dining plans. But seems the old dining plans were chosen instead.

Revenge travel will wane but Disney parks demand was super strong in 2017, 2018 and 2019. So, I am not seeing a problem unless some 2008 crash happens. Even then, Disney has levers to pull to drive demand.

 

[Jrb1979]

The dining credit offer was no where near as good as the ‘free dining plan’ and if memory serves were very limited dates.

Len Testa and Jim Hill talked about that dining credits promo on a show and made it sound like they were doing it as a test for a potential alternative to the old dining plans. But seems the old dining plans were chosen instead.

Revenge travel will wane but Disney parks demand was super strong in 2017, 2018 and 2019. So, I am not seeing a problem unless some 2008 crash happens. Even then, Disney has levers to pull to drive demand.

That's what I'm saying these moves they did are for. They pulled levers to drive demand. If the forecast was strong for next year I doubt they make changes to Genie+ or bring back the dining plan.

 

[clarker99]

That's what I'm saying these moves they did are for. They pulled levers to drive demand. If the forecast was strong for next year I doubt they make changes to Genie+ or bring back the dining plan.

I know it did. It obviously isn't drawing for Q3 or there wouldn't be all these discounts offered or APs back on sale.

You said Q3 2023 looks soft. These things are not happening till 2024. Again, nothing in the call points toward soft bookings. Stop moving the goal posts.

Plus, I am not sure any of the 2024 changes are things that will drive more people to book. It just gives people the ability pre-pay Disney for meals and line skipping. Feels like a bigger win for Disney.

 

[wabbott]

https://www.wsj.com/articles/disney...s-on-streaming-34241370?mod=markets_lead_pos5

Disney Makes Tough but Necessary Choices on Streaming
Record subscriber loss following price increase shows the trade-off between growth and profits
By Dan Gallagher
May 10, 2023 6:39 pm EDT

When Bob Iger said Disney was no longer going to chase subscribers at the expense of profits, he wasn’t kidding.

Disney’s fiscal second-quarter results Wednesday afternoon contained a couple surprises for the company’s streaming business. That segment generated an operating loss of $659 million—nearly $200 million less than Wall Street had expected and way better than the $1 billion torched by that unit three months prior.

But the flagship Disney+ service also lost 4 million paid subscribers during the quarter—its biggest drop ever and a shock to analysts who expected the service to add 1.7 million subscribers. Disney’s shares fell more than 4% following the report.

The quarter ended April 1st was the first full period since Mr. Iger returned to the chief executive officer post at Disney. And it was a busy one, with around half the period consumed by the potential for a proxy battle with an activist investor, and all of it featuring an escalating political fight in Florida.

The latter didn’t seem to keep people away from the Magic Kingdom; domestic theme park revenue rose 14% year over year to nearly $5.6 billion, which was slightly ahead of expectations. And major cost-cuts and other changes announced by Mr. Iger during the company’s last earnings call in mid-February were deemed good enough for activist Nelson Peltz to call off his campaign.

But that left Disney with the challenge of making good on its promise to sharply improve the economics of streaming, which is no easy feat. A major price increase enacted in December contributed to the first-ever reported decline in Disney+ domestic subscribers during the quarter. Those are lucrative subscribers; they pay about 61% more than the global average monthly revenue per user for Disney+.

The company also has the unique challenge of relying on expensive-to-make programs from popular franchises like Marvel and Star Wars to feed its viewership base. Marvel alone accounted for eight exclusive series totaling 57

Mr. Iger is planning to tap the brakes on that. During the company’s earnings call on Wednesday, he said it was “critical we rationalize the volume of content we’re creating, and what we’re spending to produce our content.” He is also planning another price increase, at least for the Disney+ ad-free tier, and says the company will bundle its Hulu+ offering with Disney+ into a single app, which he thinks will help reduce subscriber churn. That bundling is expected to take place before the end of this year.

Disney is right to focus on making streaming profitable – and it is hardly the only media giant having to recalibrate its streaming approach. It also still likely has some pricing room; the Disney+ Premium plan costs 45% less on a monthly basis than the top tier plan from Netflix and 31% less than HBO Max’s premier offering. But those are also general entertainment services that offer a wide variety of content – some of which would not be palatable to the Mouse House’s core family audience. In the current environment for streaming, Disney is learning that Wall Street can also be a tough audience.