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wabbott

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Disney Q4 Results Likely to Get Lift From Theme Parks
Streaming service will also be in focus

By Igor Greenwald
Published November 04, 2022

Key Takeaways
  • Walt Disney is expected to post Q4 FY 2022 adjusted earnings per share of $0.57, a year-over-year gain of 54%, aided by strong theme parks revenue, when it reports on Nov. 8.
  • The company faces questions about the future of its TV properties after one prominent investor recently demanded spin off the ESPN cable sports network.
  • The Disney+ streaming platform will also be in focus as it hikes prices and adds an ad-supported tier.
  • CEO Bob Chapek will have to deal with demands for pay raises from a union representing Disney's theme park workers in Florida.
The Walt Disney Company (DIS) heads into its fourth-quarter earnings report late on Nov. 8 with considerable business momentum and plenty of unanswered questions.

The operator of theme parks and resorts, television networks including ESPN and ABC, film studios, and the Disney+ digital streaming service is expected to post adjusted earnings per share (EPS) of $0.57, up from $0.37 a year earlier, based on the average estimate of analysts tracked by Visible Alpha. Revenue is expected to have gained 14%, bolstered by booming travel demand and the return of movie theater audiences.1

The Disney Parks, Experiences and Products operating segment, which accounted for a third of Disney's revenue and more than half its operating income over the first nine months of 2022, is expected to deliver record revenue.

Meanwhile, Disney's media and entertainment division is coping with the effects of the intense competition for viewers and digital subscriptions from other media conglomerates. Cord-cutting by cable subscribers has crimped growth at Disney's flagship sports programmer ESPN, which also faces escalating programming rights fees. Days after Disney posted third-quarter results in August, Disney investor and hedge fund manager Daniel Loeb released a public letter to Disney CEO Bob Chapek calling on the company to cut high costs and to spin off ESPN into an independent company.2

The Disney+ digital streaming service also faces competition from the likes of Netflix, Inc. (NFLX) as well as Paramount Global (PARA) and Warner Bros. Discovery, Inc. (WBD). Analysts are likely to seek out further details about the competitive positioning of Disney+ as the streaming service raises prices and adds an advertising-supported service tier next month, following in the steps of Netflix.3

Chapek's leadership is likely to remain an issue as well, in the third year of the CEO's frequently rocky tenure. While Disney's board voted unanimously to extend Chapek's contract for three years in June, he remains a lightning rod for controversy amid executive turnover.456

Chapek is facing heat as investors demand that he cut costs, while a union representing its theme park workers in Florida campaigns for a 20% raise and a minimum wage of $18 per hour.7 Some longtime theme parks patrons are already complaining that Disney's high hospitality and maintenance standards have deteriorated as a result of staff cuts during the pandemic.8

Disney's stock is down 36% in 2022, compared with a 22% decline for the S&P 500 Index. Over the past year, Disney's share price is down 42%, versus a 20% loss for the S&P 500 Index.

 One-year total return for S&P 500 and The Walt Disney Company (DIS)

Source: TradingView.
Source: TradingView


Walt Disney Earnings History​

Walt Disney posted Q3 FY 2022 results above market expectations in August, with adjusted EPS, revenue, and Disney+ subscriber numbers all topping analysts' consensus estimates. The stock gained 4.7% the next day and gave it all back within three weeks.

The company missed expectations for the second quarter in May for earnings and revenue, while revenue at its Parks, Experiences and Products segment and Disney+ subscriptions beat estimates. The stock slipped 0.9% the following day.


Walt Disney Key Stats​

Estimate for Q4 FY 2022Q4 FY 2021Q4 FY 2020
Adjusted Earnings
Per Share ($)
0.570.37-0.20
Revenue ($B)21.218.514.7
Parks, Experience and
Products Revenue ($B)
7.45.52.7

Source: Visible Alpha


The Key Metric​

Walt Disney is divided into two reporting segments: Media and Entertainment Distribution and Parks, Experiences and Products.9

Parks, Experiences and Products includes 12 theme parks and 53 resorts at six resort destinations, the Disney Cruise Line, Disney Vacation Club timeshare sales, two guided tours companies, the Imagineering division that develops Disney's theme parks, merchandise licensing, and retail sales.1011

The COVID-19 pandemic took a toll on Disney theme park revenues. Parks, Experiences, and Products revenue plummeted from $6.9 billion in Q4 FY 2019 to $1.1 billion nine months later. The segment is expected to post record revenue of $7.4 billion for Q4 FY 2022, marking a nearly full recovery for Disney's theme parks and resorts, aided by price hikes on admissions and concessions.

All the company's parks and resorts were open during Q4, although Shanghai Disneyland, which reopened on June 30 after a three-month shutdown, closed again on Oct. 31 after local authorities blocked visitors from leaving for hours for COVID-19 screening following a positive test for a resort guest.121314
 

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wabbott

DIS Veteran
Joined
Aug 4, 2021
https://www.marketwatch.com/story/d...d-to-widen-the-lead-11667763491?siteid=yhoof2

Earnings Outlook
Disney overtook Netflix as the streaming leader, and is expected to widen the lead
Published: Nov. 6, 2022 at 2:38 p.m. ET
By

Jon Swartz​


Disney earnings preview: More than 10 million net new subscribers expected for Disney as it launches ad-supported offerings while raising prices on non-advertising tiers
Walt Disney Co. is scheduled to report fiscal fourth-quarter results on Tuesday.

Walt Disney Co. displaced Netflix Inc. as king of the video-streaming market, and it is expected to widen the gap.

Disney DIS, +0.33% seized the mantle three months ago as its potent content troika of Disney+, Hulu and ESPN+ reached 221 million customers, edging Netflix’s 220 million subscribers. Analysts expect Disney to report more than 10 million net new subscribers in the third quarter, which would greatly outdistance Netflix’s NFLX, -3.07% addition of 2.4 million subscribers in the period.

The competition should increase as both companies launch advertising-supported platforms in the fourth quarter — Disney plans to launch in the U.S. on Dec. 8 after Netflix NFLX, -3.07% unveiled its own ad-supported service for $6.99 a month in the U.S. on Nov. 3. And analysts still like Disney’s chances to outperform the streaming pioneer.

“Disney+ ad-supported will do very well and outshine Netflix” Corey Kulis, vice president of marketing at software company Verve Group, predicted to MarketWatch. “While Netflix needs to develop and partner for technology, stand up a new organization, get introduced to buyers, and so on, Disney has all this in place.”

When the Disney+ ad tier debuts in the U.S. and overseas in 2023, UBS analyst John Hodulik expects Disney+’s ad-tier service to add $1 billion in incremental revenues in its first 12 months. Macquarie Research analyst Tim Nollen models slightly less, an $800 million sales opportunity next year if all markets were to launch, but also foresees Disney’s direct-to-consumer revenue outpacing linear networks by the fourth quarter.

“We think near-term subscriber growth will accelerate on content releases and international expansion, and next year’s slate looks impressive too, after ‘Black Panther 2’ and ‘Avatar 2’ release in theaters in November and December, and follow on Disney+,” Nollen said in an Oct. 31 note that maintained an outperform rating and price target of $140.




Insider Intelligence expects the ad-supported tier of Disney+ to reach $1.02 billion in the U.S. in 2023, and $1.19 billion in 2024.

“Disney already knows its audience and the advertising industry incredibly well,” Ashwin Navin, CEO of Samba TV, told MarketWatch. “The significant opportunity to align with its top-tier content will accelerate new and untapped dollars flowing into Disney’s ad-supported streaming service.”

Disney’s subscription and revenue growth in video-streaming against the likes of Netflix, Apple Inc. AAPL, -0.19%, Comcast Corp. CMCSA, +2.04%, Amazon.com Inc. AMZN, +1.88%, Warner Bros. Discovery Inc. WBD, -12.87%, Paramount Global PARA, -3.95%, and others has been the focus of Chief Executive Bob Chapek as a financial catalyst for its wide range of businesses. The idea is that the so-called DTC model will accelerate and spur sales for theme parks, merchandise, traditional movies and TV, hotels and cruises.

Last week, Disney said it would launch a “limited test” of selling themed merchandise such as lightsaber collectibles and themed clothing tied to selected Disney+ shows and movies like “Star Wars,” “Black Panther” and “Frozen” for about a week.

What to expect

Earnings: Analysts surveyed by FactSet on average expect Disney to report adjusted fourth-quarter earnings of 55 cents a share, up from 9 cents a share a year ago.

Contributors to Estimize — a crowdsourcing platform that gathers estimates from Wall Street analysts as well as buy-side analysts, fund managers, company executives, academics and others — are projecting earnings of 65 cents a share on average.

Revenue: Analysts on average expect Disney to report $21.28 billion in fourth-quarter revenue, a jump from $18.5 billion a year ago. Estimize contributors predict $21.5 billion on average.

Stock movement: Disney shares have bounced between post-earnings gains and losses in recent years, rising after six of the past 12 reports.

Disney’s stock has tumbled 35.7% so far this year while the S&P 500 index SPX, +1.36% has dropped 20.9%. Shares of Disney have declined 6.6% since the company announced quarterly results three months ago.

What analysts are saying​

In a note last week, Guggenheim analyst Michael Morris predicted Disney will add 10.8 million total direct-to-consumer subscribers in the fourth quarter. Netflix reported 2.4 million net member additions during its recently-completed third quarter, ahead of its guidance of 1 million.

Attendance at Disney theme parks remains balky in the Covid era. KeyBanc Capital Markets analyst Brandon Nispel noted domestic geolocation data tracking Disney attendance ended the quarter “somewhat negative.”

He said Walt Disney World was closed on Sept. 28-29 because of Hurricane Ian, and “we’re seeing [year-over-year] growth rates decelerate faster than expected.” Total Disney theme park attendance for September was 82% of 2019, pre-Covid levels, Nispel said in an Oct. 19 note.


Disney shares on average are rated overweight with a price target of $136.75 by 28 analysts polled on FactSet.
 

RivShore

DIS Veteran
Joined
Sep 27, 2019
Awful quiet in here on earnings day.

Anyone know what is driving Nasdaq down today? It looks like DIS is following it down. They both were up 2% a bit ago and now both down.
 

wabbott

DIS Veteran
Joined
Aug 4, 2021
https://finance.yahoo.com/news/disney-earnings-q4-fourth-quarter-results-164357146.html

Disney set to report Q4 earnings after the bell — here's what to expect​

Alexandra Canal
·Senior Reporter
Tue, November 8, 2022 at 10:43 AM


Disney (DIS) is set to report its fiscal fourth-quarter earnings on Tuesday after the bell as investors eye advancements in streaming profitability and the health of its theme parks business amid various macroeconomic headwinds.
Here's what Wall Street expects, according to Bloomberg consensus estimates:

  • Revenue: $21.26 billion expected
  • Adj. earnings per share (EPS): $0.51 expected
  • Disney+ subscriber net additions: 9.35 million expected
  • Parks, experience and consumer products revenue: $7.59 billion expected
Disney+ reported a surge of subscribers in the third quarter (14.4 million) amid new market launches and a robust slate of content like "Obi-Wan Kenobi." Although subscriber net additions are expected to decelerate in the fourth quarter to just 9.35 million, recent price hikes suggest average revenue per user of $4.29, according to estimates.
The company will roll out its $7.99 ad-supported tier in December, one month after Netflix's much-anticipated debut. Despite the overall slowdown in ad spend, analysts remain bullish on the profitability prospects of ad-supported plans — especially for streaming companies.


Investors will be keeping a close eye on direct-to-consumer losses after the company maintained its goal of reaching streaming profitability by 2024. Disney+, Hulu, and ESPN+ lost a combined $1.1 billion in the third quarter, but Disney CFO Christine McCarthy said she expects peak Disney+ losses by this year.

The company lowered its 2024 subscriber guidance to between 215 million to 245 million paying users — down from the prior 230 million to 260 million. It now anticipates 135 million to 165 million "core" Disney+ subs, while its Indian brand Disney+ Hotstar's subscriber forecast is set at 80 million.

The guidance slash came as a result of slowing subscriber trends in addition to the loss of its streaming rights for the Indian Premier League, which could cause a dip in Hotstar subscribers.

Hotstar makes up about 36% of the total Disney+ user base. As of the period ending July 2, 2022, Disney+ Hotstar members totaled 58.4 million (up from the second quarter's 50.1 million.)

Park operations amid recession fears

Disney's theme parks, which saw quick COVID bounce backs amid increased attractions, price hikes, and updated technologies like the Genie+ app, are widely expected to outperform in the quarter — despite fears of an impending recession.

Wall Street expects revenue from the company's parks, experiences, and consumer products division to come in at $7.59 billion, with operating income estimated at $1.9 billion.

Similar to slowing subscriber net additions, operating income is expected to drop off compared to the third quarter's whopping $2.19 billion. Analysts warn that Hurricane Ian likely pressured profits, while macroeconomic challenges like inflation remain a concern.

The company will likely tout its upcoming film slate on the earnings call ("Black Panther: Wakanda Forever," "Avatar: The Way of Water," and more), but management could also face questions on the future of Hulu and ESPN, along with its ad tier expectations.

Overall, despite Disney's strong positioning relative to competitors, a potential warning on forward-looking guidance or a lowering of its subscriber or revenue estimates could trigger a sell-off as investors brace for more economic volatility.
 

wabbott

DIS Veteran
Joined
Aug 4, 2021
Awful quiet in here on earnings day.

Anyone know what is driving Nasdaq down today? It looks like DIS is following it down. They both were up 2% a bit ago and now both down.
This story could be what dinged DIS.

https://www.marketwatch.com/story/n...g-live-sports-report-2022-11-08?siteid=yhoof2

Netflix is interested in carrying live sports: report Published: Nov. 8, 2022 at 1:54 p.m. ET
By Jon Swartz

Netflix Inc. is thinking of getting into the game of offering live sports, much as its rivals Walt Disney Co. , Apple Inc. , Amazon.com Inc. and Comcast Corp. do, according to a Wall Street Journal report Tuesday. The video-streaming company, which spends billions of dollars annually on movies and shows, recently bid for streaming rights for the ATP tennis tour for some European countries, including France and the U.K., but dropped out, one of the people said. Netflix has also mulled bidding for U.K. rights to the Women's Tennis Association and cycling competitions, the WSJ reported.
 

clarker99

Mouseketeer
Joined
May 15, 2019
Awful quiet in here on earnings day.

Anyone know what is driving Nasdaq down today? It looks like DIS is following it down. They both were up 2% a bit ago and now both down.
DIS earnings feel like they are gonna pretty boring. I think most know what to expect. Streaming will be the story and that prob does't move the needle in this time of zero growth/recession and uncertainty.

I was just down in WDW for 8 nights and it was terrific. 1st time back in 3 years. All the negative narratives being talked about on blogs and on these forums just didn't exist. We had a great time with no hiccups :)
 

wabbott

DIS Veteran
Joined
Aug 4, 2021
Disney Parks, Experiences and Products revenues for the quarter increased to $7.4 billion compared
to $5.5 billion in the prior-year quarter. Segment operating income increased $0.9 billion to $1.5 billion
compared to $0.6 billion in the prior-year quarter.
 

clarker99

Mouseketeer
Joined
May 15, 2019
Disney Parks, Experiences and Products revenues for the quarter increased to $7.4 billion compared
to $5.5 billion in the prior-year quarter. Segment operating income increased $0.9 billion to $1.5 billion
compared to $0.6 billion in the prior-year quarter.
Where was the missing $1b in revenue from?
 

wabbott

DIS Veteran
Joined
Aug 4, 2021
Said Bob Chapek:

“2022 was a strong year for Disney, with some of our best storytelling yet, record results at our Parks,
Experiences and Products segment, and outstanding subscriber growth at our direct-to-consumer services, which
added nearly 57 million subscriptions this year for a total of more than 235 million,” said Bob Chapek, Chief
Executive Officer, The Walt Disney Company. “Our fourth quarter saw strong subscription growth with the
addition of 14.6 million total subscriptions, including 12.1 million Disney+ subscribers. The rapid growth of
Disney+ in just three years since launch is a direct result of our strategic decision to invest heavily in creating
incredible content and rolling out the service internationally, and we expect our DTC operating losses to narrow
going forward and that Disney+ will still achieve profitability in fiscal 2024, assuming we do not see a meaningful
shift in the economic climate. By realigning our costs and realizing the benefits of price increases and our Disney+
ad-supported tier coming December 8, we believe we will be on the path to achieve a profitable streaming business
that will drive continued growth and generate shareholder value long into the future. And as we embark on Disney’s
second century in 2023, I am filled with optimism that this iconic company’s best days still lie ahead.”(2)
 

clarker99

Mouseketeer
Joined
May 15, 2019
DIS earnings feel like they are gonna pretty boring. I think most know what to expect. Streaming will be the story and that prob does't move the needle in this time of zero growth/recession and uncertainty.
This aged like milk in the Florida sun. Lol
 









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