Disney (DIS) To be set to report its fiscal fourth quarter earnings Tuesday after the bell as investors eyed advances in online profitability and the health of its amusement park business amid varying macroeconomic backdrops.
Here’s what Wall Street expects, according to Bloomberg consensus estimates:
Turnover: $21.26 billion expected
Adjective. earnings per share (EPS): $0.51 expected
Disney+ Subscriber Net Addition: 9.35 expected million
Parks, experiences and consumer product revenue: $7.59 billion expected
Disney + reported a spike in subscribers in the third quarter (14.4 million) amid a new market launch and a strong lineup of content like “Obi-Wan Kenobi.” While subscriber net addition is expected to decelerate in Q4 to just 9.35 million, recent price spikes show average revenue per user of $4.29, according to estimates.
The company will roll out the $7.99 ad-support tier in December, a month after Netflix’s much-anticipated debut. While overall ad spend is slowing, analysts are optimistic about the profit outlook of ad-supported plans – especially for streaming companies.
Investors will be keeping a close eye on direct-consumer losses after the company maintains its goal of achieving online profitability by 2024. Disney+, Hulu, and ESPN+ have all lost a combined 1.1 billion dollars in the third quarter, but Disney CFO Christine McCarthy said she expects the highest Disney+ losses this year.
The company lowered its 2024 registration guidance to between 215 million and 245 million paying users – down from 230 million to 260 million previously. It now predicts 135 million to 165 million “core” Disney+ subscribers, while its Indian brand Disney + HotstarSubscriber forecast is set at 80 million.
The guidance cuts come as a result of slowing subscriber trends coupled with the loss of streaming rights for the Indian Premier League, which could lead to a drop in Hotstar subscribers.
Hotstar accounts for about 36% of all Disney+ users. As of July 2, 2022, Disney+ Hotstar’s total membership was 58.4 million (up from 50.1 million in the second quarter).
Park operations amid recession fears
Disney theme parks, which have seen COVID recover quickly amid increased attractions, rising prices, and updated technologies like Genie + appsis expected to outperform this quarter – despite fears of an impending recession.
Wall Street expects revenue from the company’s parks, experiences and consumer products division to reach $7.59 billion, with operating income estimated at $1.9 billion.
Similar to the slowdown in subscriber net additions, operating income is expected to fall from the third quarter’s whopping $2.19 billion. Analysts warned that Hurricane Ian could weigh on profits, while macroeconomic challenges such as inflation remain a concern.
The company will likely feature its upcoming film on earnings calls (“Black Panther: Wakanda Forever,” “Avatar: The Way of Water,” and more), but management might as well. faces questions about the future of Hulu and ESPN, along with the expectations of its advertising level.
Overall, despite Disney’s strong positioning relative to competitors, a potential warning about future guidance or a drop in subscriber numbers or revenue estimates could trigger a sell-off. when investors are subject to many economic fluctuations.