The ‘Partners’ statue of Walt Disney and Mickey Mouse, at Cinderella Castle in the Magic Kingdom, Walt Disney World, in Lake Buena Vista, Florida, pictured 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 company’s continued recovery since Bob Iger returned as CEO in 2022 — particularly results for the company’s streaming and theme park businesses.
Here’s what Wall Street expects Disney to report, according to LSEG:
- Earnings per share: Expected $1.19
- Income: $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 does not include Disney+ Hotstar in India and other countries in the region — grew by more than 6 million to 117.6 million customers worldwide. Total Hulu subscribers rose 1% to 50.2 million. ESPN+ subscribers, meanwhile, fell 2% to 24.8 million.
Like all media, 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 came close to that milestone last quarter thanks to Disney+ and Hulu, “persistent losses at ESPN+ and soft guidance … suggest a tough road ahead,” said Paul Verna, vice president of content for eMarketer.
During the company’s latest earnings call, executives warned that they did not expect to see customer additions in the third quarter, but did expect a return to growth in the fourth quarter.
Although ESPN+ has weighed on Disney’s streaming unit, its TV network remains a bright spot for the company’s traditional TV business. However, this traditional TV business is expected to decline as customers continue to cut the cord on pay TV packages.
Meanwhile, Disney’s theme parks division are also a key focus, as they have been the driving force behind the company’s earnings. The status of Disney’s specialty parks for the US will be of particular interest.
Disney has committed to spending $60 billion in theme park investments over the next decade, a clear signal of the importance of the business.
Last quarter, US parks and experiences revenue rose 7% to $5.96 billion, with international sales up 29% to $1.52 billion due to higher attendance and prices at Hong Kong Disneyland Resort. Emarketer’s Verna expects the “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 higher labor costs.
Last month ComcastIts earnings were weighed down by Universal’s theme parks, which the company attributed to increased competition from cruise lines and international tourism. Despite that, 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.
