DIS Shareholders and Stock Info ONLY

[wabbott]

dividend declared

 

[wabbott]

https://www.marketwatch.com/articles/disney-earnings-stock-price-1fa9a48b?mod=mw_latestnews

Disney Stock Jumps on Solid Earnings. Disney+ Was a Bright Spot.
Last Updated: Nov. 8, 2023 at 5:02 p.m. EST First Published: Nov. 8, 2023 at 3:00 a.m. EST
by Eric J. Savitz


Disney shares were rising in late trading Wednesday after the entertainment giant posted quarterly earnings that edged ahead of Wall Street’s estimates.

Results for the fiscal fourth quarter ended Sept. 30 included better-than-expected subscriber growth for its Disney+ streaming service.

The stock was up as much as 4% after the report.

Disney posted revenue for the quarter of $21.2 billion, up 5% from the year ago quarter, and a little shy of Wall Street’s consensus estimate of $21.4 billion. Profits were 82 cents a share, up from 30 cents a year earlier and above the Street’s 71 cents; earnings from continuing operations were 14 cents, up from 9 cents in the year earlier period.

The company said it added nearly seven million core subscribers to Disney+ in the quarter, increasing the total to 112.6 million, and beating expectations by about three million subscribers.

The company said it now has 5.2 million subscribers for its ad-supported version of Disney+, with more than half of new domestic subscribers choosing the ad tier. Disney also said it doesn’t expect to focus on reducing password sharing until 2025. The company continues to expect streaming to reach profitability in the fourth quarter of fiscal 2024.

Disney posted revenue in its entertainment segment, which includes movies and television, of $9.5 billion, up 2% from a year earlier, and a little shy of Street estimates.

The sports segment, mostly ESPN, had revenue of $3.9 billion, flat with a year ago and in line with estimates. The experience segment, which includes theme parks, cruises, hotels, and licensed products, had revenue of $8.2 billion, up 13%, and above consensus at $7.8 billion.

The company also said that it remains focused on reducing costs, and now expects its “annualized efficiency target” to $7.5 billion, from $5.5 billion.

“Our results this quarter reflect the significant progress we’ve made over the past year,” CEO Robert Iger said in a statement. “While we still have work to do, these efforts have allowed us to move beyond this period of fixing and begin building our businesses again.”

For the December quarter, Wall Street has been projecting revenue of $24.2 billion, with profits of $1.15 a share.
Walt Disney shares have been left out of this year’s rally, with the stock down 3% since the end of December. The company has been hurt by the combined effects of weaker results at ESPN, softer growth in the streaming sector, and the continued erosion of linear TV viewing.

Iger is under pressure to make big moves. He has said that the company would consider the sale of non-core assets, which could include high-profile properties like ABC. And the company needs to reset the future of ESPN, potentially with outside financial partners.

Disney investors are getting a first look this week at new Chief Financial Officer Hugh Johnston, who was named to the post on Monday. He replaces interim CFO Keivn Lansberry, who had been serving in the role since June following the departure of Christine McCarthy. Johnston joins Disney following a 34-year career at PepsiCo (PEP), where he had served most recently as CFO and vice chairman.

In a research note this week, Lightshed Partners analyst Richard Greenfield outlined a dozen strategic questions for Disney heading into the quarter. Some of those are focused on the future of ESPN—and the company’s stated plan to launch a direct-to-consumer version of the channel given the shrinking base of cable TV subscribers. The core issue for ESPN, Greenfield wrote, is that the cost of sports rights is rising faster than the related revenue.

Greenfield is also looking for some more information about Disney’s planned acquisition of Comcast’s (CMCSA) one third stake in Hulu. He wonders whether Disney will remain committed to Hulu + Live TV, the company’s internet-based cable replacement services which competes with Sling and YouTube TV.

 

[mdmost]

Nothing like claiming you're going to invest in the parks in a "turbocharged" way and then it's really you're going to invest in the parks by the end of this decade.

https://twitter.com/x/status/1722373943019880695

 

[wabbott]

Nothing like claiming you're going to invest in the parks in a "turbocharged" way and then it's really you're going to invest in the parks by the end of this decade.

https://twitter.com/x/status/1722373943019880695

Indeed. they aint in no hurry.

 

[irlandaise]

https://www.hollywoodreporter.com/business/business-news/warner-bros-discovery-revenues-1235640322/

Wiedenfels also warned the sluggish linear TV advertising market may not markedly improve any time soon, and visibility for the studio’s TV production business was hampered by the Hollywood actors strike. “This is an evolving process and there is a real risk at this point that some negative financial impact of the strike will extend into 2024 to some extent,” he told analysts.

Maybe he means they won't be able to issue accurate guidance or something. But you're correct, it doesn't make much sense.

Okay, yeah, "ability to predict revenues and expenses" is a reasonable theory for what "visibility" means in this context. Thanks.

 

[irlandaise]

“Parks and Experiences overall remains a growth story, and we are managing our portfolio exceptionally well,” Iger said.

He added, “even in the case of Walt Disney World, where we have a tough comparison to the prior year, when you look at this year’s numbers compared to pre-pandemic levels in fiscal ’19, we have seen growth in revenue and operating income of over 25 and 30%, respectively.”

No mention of attendance figures? Not raw numbers; I know that Disney doesn't release those. But weren't we expecting increase/decrease percentages?

 

[HokieRaven5]

“Parks and Experiences overall remains a growth story, and we are managing our portfolio exceptionally well,” Iger said.

He added, “even in the case of Walt Disney World, where we have a tough comparison to the prior year, when you look at this year’s numbers compared to pre-pandemic levels in fiscal ’19, we have seen growth in revenue and operating income of over 25 and 30%, respectively.”

No mention of attendance figures? Not raw numbers; I know that Disney doesn't release those. But weren't we expecting increase/decrease percentages?

Usually is only included in the filings with the SEC. That may not be filed for another 2-3 weeks based upon their recent history when they file their full annual report.

 

[Jrb1979]

“Parks and Experiences overall remains a growth story, and we are managing our portfolio exceptionally well,” Iger said.

He added, “even in the case of Walt Disney World, where we have a tough comparison to the prior year, when you look at this year’s numbers compared to pre-pandemic levels in fiscal ’19, we have seen growth in revenue and operating income of over 25 and 30%, respectively.”

No mention of attendance figures? Not raw numbers; I know that Disney doesn't release those. But weren't we expecting increase/decrease percentages?

My guess is they can't be that good as Iger avoided the question about it. I don't see it getting much better as there is next to nothing new coming for closer to 10 years.

 

[HokieRaven5]

SAG-AFTRA Reaches Tentative Agreement With Studios, Ending Actors Strike

After a grueling 118 days on strike, SAG-AFTRA has officially reached a tentative agreement on a new three-year contract with studios, a move that is heralding the end of the 2023 actors’ strike.

The SAG-AFTRA TV/Theatrical Committee approved the agreement in a unanimous vote on Wednesday, SAG-AFTRA announced. The strike will end at 12:01 am Thursday. On Friday, the deal will go to the union’s national board on Friday for approval.

The performers’ union announced the provisional agreement on Wednesday, after about two weeks of renewed negotiations. The development on Wednesday came not long before a deadline of 5 p.m. that the Alliance of Motion Picture and Television Producers had set for the union to give their answer on whether they had a deal.

 

[clarker99]

My guess is they can't be that good as Iger avoided the question about it. I don't see it getting much better as there is next to nothing new coming for closer to 10 years.

30% growth in operating income at WDW vs 2019. I think attendance is an after thought at this time.

Record quarter from International parks.

Overall record fiscal year for the Parks side of the company.

 

[Elijah Abrams]

dividend declared

What does that mean?

Also, I really feel like Iger needs to be given the boot IMMEDIATELY, because there’s is NO FREAKING WAY we are waiting for new attractions and etc. in the back half of the next decade! He has failed us fans now!

EDIT: Forget what I said. It came from Kevin Lansberry's mouth, and he’s about to get replaced by Hugh Johnston, who’s likely to speed up the timeline of the investment.

 

[wabbott]

What does that mean?

Also, I really feel like Iger needs to be given the boot IMMEDIATELY, because there’s is NO FREAKING WAY we are waiting for new attractions and etc. in the back half of the next decade! He has failed us fans now!

EDIT: Forget what I said. It came from Kevin Lansberry's mouth, and he’s about to get replaced by Hugh Johnston, who’s likely to speed up the timeline of the investment.

CFO Kevin Lansberry said in the earnings call that they would recommend to the board that a dividend be paid by the end of the calendar year. No amount was mentioned.

 

[wabbott]

https://www.fool.com/earnings/call-...-disney-dis-q4-2023-earnings-call-transcript/

Walt Disney (DIS) Q4 2023 Earnings Call Transcript
By Motley Fool Transcribing – Nov 8, 2023 at 7:45PM CST

 

[bryaalre]

Some remarks from the earnings call that I haven't seen posted:

"We continue to expect to reach profitability at our combined streaming businesses in Q4 of fiscal 2024. Although as we have mentioned in the past, we don't expect linear progress from quarter to quarter. While we expect entertainment B2C operating losses in Q1 to be generally in line with Q4 due to higher sports rights costs at ESPN+ aligned with the start of the NHL season. We anticipate a modest sequential decline in Q1 for the combined streaming business. But as we have also said previously, we anticipate upward momentum later in the fiscal year to be driven by realizing the full impact of price increases, the launch of the ad tier internationally, and subscriber growth."

"to the first question, the trajectory of DTC, we're not going to get specific -- we're not giving any guidance beyond our guidance about becoming profitable at the end of '24."

"One thing that we have recently really come to appreciate is the performance of our big title films, the so-called Pay 1 window films on the service. Elemental is one. Guardians of the Galaxy 3 was another. Little Mermaid, the third. The numbers are huge. That's a differentiator for us, certainly, when it comes to competing with Netflix, for instance, which is the gold standard. But by leaning more into some of those films and while we improve the quality of them, gives us the ability to dial back a bit on some of the spending and investment in series. And that blend of spending between films and series, we believe, gives an opportunity to increase our margins and grow the business."

Overall impressions are that it is the same things they have been saying for years. The goal to achieve profitability in streaming DTC (ESPN+ did report profitability during the quarter) is Q4 2024 and to do expect it sooner. Q1 according to them will be around the same $400M loss for streaming as they won't see the full price increase and content cuts for a few quarters.

Content cuts to Disney+ seem permanent and their comments about Pay 1 window movies would back that up. This is a smart decision. Some people may say that they need to make more content for Disney Plus but in my opinion, it does not matter where content comes from, as long as new content does get added. These movies act as new content for a lot of people and for the most part, are going to be higher quality than the content produced for the service.

 

[hertamaniac]

CFO Kevin Lansberry said in the earnings call that they would recommend to the board that a dividend be paid by the end of the calendar year. No amount was mentioned.

My guess is it will be <.88/share. I think that was the last payout in 2020.

 

[clarker99]

Some remarks from the earnings call that I haven't seen posted:

"We continue to expect to reach profitability at our combined streaming businesses in Q4 of fiscal 2024. Although as we have mentioned in the past, we don't expect linear progress from quarter to quarter. While we expect entertainment B2C operating losses in Q1 to be generally in line with Q4 due to higher sports rights costs at ESPN+ aligned with the start of the NHL season. We anticipate a modest sequential decline in Q1 for the combined streaming business. But as we have also said previously, we anticipate upward momentum later in the fiscal year to be driven by realizing the full impact of price increases, the launch of the ad tier internationally, and subscriber growth."

"to the first question, the trajectory of DTC, we're not going to get specific -- we're not giving any guidance beyond our guidance about becoming profitable at the end of '24."

"One thing that we have recently really come to appreciate is the performance of our big title films, the so-called Pay 1 window films on the service. Elemental is one. Guardians of the Galaxy 3 was another. Little Mermaid, the third. The numbers are huge. That's a differentiator for us, certainly, when it comes to competing with Netflix, for instance, which is the gold standard. But by leaning more into some of those films and while we improve the quality of them, gives us the ability to dial back a bit on some of the spending and investment in series. And that blend of spending between films and series, we believe, gives an opportunity to increase our margins and grow the business."

Overall impressions are that it is the same things they have been saying for years. The goal to achieve profitability in streaming DTC (ESPN+ did report profitability during the quarter) is Q4 2024 and to do expect it sooner. Q1 according to them will be around the same $400M loss for streaming as they won't see the full price increase and content cuts for a few quarters.

Content cuts to Disney+ seem permanent and their comments about Pay 1 window movies would back that up. This is a smart decision. Some people may say that they need to make more content for Disney Plus but in my opinion, it does not matter where content comes from, as long as new content does get added. These movies act as new content for a lot of people and for the most part, are going to be higher quality than the content produced for the service.

I went over the numbers we have so far and the call went about as expected. The only real niggle for me is that I had higher expectations for the Direct to Consumer division's bottom line. Wall Street seems to have responded well to the sub growth but I thought they would be closer to break-even. Then the guidance was less bullish that I expected.

I thought Q1FY24 would be the 1st break-even quarter for the DTC division but now I think we wait till at least Q2.

As you noted above, ESPN+ was in the black even with depreciation included. A nice feat and there is runway for higher prices for the app.

Cash in hand increased to $14B. Cash flow generated over the last FY was best since pre-pandemic and a dividend is returning.

 

[bryaalre]

I went over the numbers we have so far and the call went about as expected. The only real niggle for me is that I had higher expectations for the Direct to Consumer division's bottom line. Wall Street seems to have responded well to the sub growth but I thought they would be closer to break-even. Then the guidance was less bullish that I expected.

I thought Q1FY24 would be the 1st break-even quarter for the DTC division but now I think we wait till at least Q2.

As you noted above, ESPN+ was in the black even with depreciation included. A nice feat and there is runway for higher prices for the app.

Cash in hand increased to $14B. Cash flow generated over the last FY was best since pre-pandemic and a dividend is returning.

Their wording of profitability happening in 2024 has always struck me as Q4. I don't expect breakeven before that and could see a reversal in Q1 2025 based on how much content they have for that quarter. I am bullish on the DTC business overall but their lingo has always struck me as "we'll have one quarter in 2024 that will appease shareholders".

The rest of the quarter was par for the course and as you said expected. The surge in subscribers is nice and they mention that the summer promotions had a large effect on that and we'll see if they stay after that promotion ends.

The back end turbo charge in the parks is disappointing as I would have liked to see it ramp up now, especially with cash flow improving as much as it has. It seems as though they are content on letting Epic Universe open and than a year or two later trying to steal its thunder with new attractions, lands, etc. We'll see how everything goes but onto the next quarter.

 

[wabbott]

My guess is it will be <.88/share. I think that was the last payout in 2020.

Correct, $1.76/share for the full year, paid in two installments. If we get half that amount, I will be surprised.

 

[wabbott]

The back end turbo charge in the parks is disappointing as I would have liked to see it ramp up now, especially with cash flow improving as much as it has. It seems as though they are content on letting Epic Universe open and than a year or two later trying to steal its thunder with new attractions, lands, etc. We'll see how everything goes but onto the next quarter.

I concur with your disappointment in the parks spending. If you read the entire transcript, notice how little the parks were talked about by both Iger and Lansberry. That indicates to me that they plan to continue wringing as much money out of the guests as possible, while skimping on parks staffing. Recall, there was something in the call about parks' "wage inflation."

 

[clarker99]

Their wording of profitability happening in 2024 has always struck me as Q4. I don't expect breakeven before that and could see a reversal in Q1 2025 based on how much content they have for that quarter.

Yeah, you are correct that the language has stated end of FY24 but the SG & A savings they found almost instantly were very encouraging. Last quarter they still had $150m/quarter in savings to go to realize the $3B/yr reduction in SG & A spend and they had not seen any of the $2.5B savings from content spend reductions.

So, the cost trend looked really good up till this quarter. I am interested to see the SEC filings to find out what the hiccup was.

Then you add in the price increases and we should see that gap really close. My math has the gap at approximately $1.05/month per user to break-even for Dis+/Hulu.

It really doesn't feel like that big of a mountain but when you look at domestic ARPU for Netflix and WBD in the $11-$12/mo range you realize Disney has a ways to go to reach those levels. Disney's domestic ARPU was only $7.50/mo.

Anyway, it is what it is. Disney's Entertainment division has another easy comparable quarter in Q1FY24 vs Q1FY23 and the ship feels much more stable than a year ago.