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Disney Earnings: Streaming Subscriber Growth and Theme Park Visitation in Focus

Disney Set to Report Q2 Earnings: Streaming Subscriber Growth and Theme Park Visitation in Focus

Disney is set to release its fiscal second-quarter earnings report on Tuesday, and analysts will be closely watching the company’s streaming subscriber growth and outlook, as well as visitation numbers at its theme parks. Since CEO Bob Iger announced a reorganization over a year ago, which led to job losses and cost cuts, this will be the first earnings call for Disney. Moreover, it will be the first call since the company won a proxy fight against Nelson Peltz’s Trian Partners.

Wall Street analysts expect Disney to report earnings per share of $1.10 and revenue of $22.11 billion. However, the main focus will be on the subscriber growth of its flagship streaming service, Disney+. According to BofA Securities analyst Jessica Reif Ehrlich, streaming is anticipated to become profitable in the fourth quarter of 2024.

Last quarter, Disney’s direct-to-consumer unit, which includes Hulu and ESPN+, narrowed its losses to $216 million from $1.05 billion in the same period the previous year. However, Disney+ experienced a decline of 1.3 million core subscribers due to price hikes. Nevertheless, the company reported an increase in average revenue per user.

Another area of interest for investors is the integration of Hulu into Disney+ and the appraisal process that will determine the value of Comcast’s stake in Hulu. Additionally, analysts will be paying attention to visitor traffic at Disney’s theme parks in the U.S., particularly in Orlando. According to a Deutsche Bank research note, growth had slowed last year due to lower numbers in Orlando. Comcast also reported a slowdown at its Universal Orlando theme park, citing increased competition, particularly from cruises. However, this could work in Disney’s favor due to its new cruise ship.

In conclusion, as Disney prepares to release its Q2 earnings report, all eyes will be on the growth of its streaming service and the performance of its theme parks. The company’s reorganization and recent proxy fight victory against Trian Partners add an additional layer of significance to this earnings call. Investors will be looking for signs of profitability in Disney’s streaming division and updates on the integration of Hulu. Moreover, visitor traffic at Disney’s theme parks, especially in Orlando, will provide insights into the company’s recovery from the impact of the pandemic and competition in the entertainment industry.

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