The “Partners” statue of Walt Disney and Mickey Mouse, at Cinderella Castle at the Magic Kingdom, at Walt Disney World, in Lake Buena Vista, Florida, photographed Saturday, June 3, 2023.
Joe Burbank | Tribune News Service | Getty Images
Disney reports earnings before the bell, and Wall Street will be paying close attention to the ongoing turnaround of the company since Bob Iger returned as CEO in 2022 — particularly the results for the company’s streaming and theme parks businesses.
Here is what Wall Street expects Disney to report, according to LSEG:
- Earnings per share: $1.19 expected
- Revenue: $23.071 billion expected
On the streaming front, Disney+ and Hulu turned a profit for the first time last quarter.
During Disney’s second quarter, Disney+ Core subscribers — which excludes Disney+ Hotstar in India and other countries in the region — grew by more than 6 million to 117.6 million global customers. Total Hulu subscribers increased 1% to 50.2 million; ESPN+ subscribers, meanwhile, fell 2% to 24.8 million.
Like all of its media peers, Wall Street is closely watching Disney’s streaming unit — which includes Disney+, Hulu and ESPN+ — especially as the company has said it aims to achieve profitability for the combined services by the end of the year.
While Disney moved closer to that milestone last quarter thanks to Disney+ and Hulu, “persistent losses in ESPN+ and soft guidance … suggest a rocky road ahead,” said Paul Verna, vice president of content for eMarketer.
During the company’s last earnings call, executives warned that they didn’t expect to see customer additions in the third quarter but anticipated returning to growth in the fourth quarter.
Although ESPN+ has weighed down Disney’s streaming unit, its TV network counterpart remains a bright spot for the company’s traditional TV business. Nonetheless, that traditional TV business is expected to slump as customers continue cutting the cord of pay TV bundles.
Meanwhile, Disney’s theme parks division are also a key focus, as they have been the profit driver for the company. The state of Disney’s U.S.-specific parks will be of interest, in particular.
Disney has pledged to spend $60 billion in investments on its theme parks over the next decade, a clear signal of the importance of the business.
Last quarter, the U.S. parks and experiences division revenue was up 7% to $5.96 billion, with international sales soaring 29% to $1.52 billion due to higher attendance and prices at Hong Kong Disneyland Resort. Emarketer’s Verna expects “positive momentum” to continue for the parks.
However, Disneyland Resort in California was under pressure with lower profits. Executives had attributed the year-over-year decline to cost inflation, including high labor expenses.
Last month Comcast‘s earnings were weighed down by its Universal theme parks, which the company attributed to increased competition from cruises and international tourism. Despite this, Comcast executives said they remained “bullish” on the business, especially with a new theme park opening in 2025.
Disclosure: Comcast owns NBCUniversal, the parent company of CNBC.
