Walt Disney Co. Chief Executive Robert Iger has his hands full as the media giant preps for its fiscal fourth-quarter earnings report Wednesday.
The company’s
DIS,
once-prodigious cable-television assets, like ESPN, are being hollowed out amid cord cutting and a weak advertising market, and Disney’s money-losing streaming business is in need of a jolt. Iger is taking radical steps that could include the sale of major businesses, like ABC. A key part of Iger’s recovery plan is a significant price hike for streaming subscriptions and a crackdown on account sharing, announced last quarter.
At the same time, activist investor Nelson Peltz has renewed his push for a seat on the company’s board — this time with help from Ike Perlmutter, former chair of Marvel Entertainment.
On Monday, Disney named a new chief financial officer, Hugh F. Johnston, the former longtime CFO of PepsiCo Inc.
PEP,
Here is what to expect from Disney on Wednesday.
What to expect
Earnings: Analysts tracked by FactSet project Disney to report 71 cents a share in earnings, compared with 30 cents a share a year before. On Estimize, which crowdsources projections from hedge funds, academics and others, the average projection also calls for 71 cents a share in earnings.
Revenue: The FactSet consensus calls for $21.37 billion in revenue, up from $20.15 billion the previous year. Those contributing to Estimize also expect $21.37 billion in revenue.
Stock movement: Shares of Disney have receded 2% this year, most of that in the last six months. The S&P 500 index
SPX
is up 13.5% in 2023.
Of the 34 analysts tracked by FactSet who cover Disney shares, 23 have buy ratings, six have hold ratings and two recommend to sell, with an average price target of $103.89.
What to watch for
When Disney reports Wednesday, Macquarie senior media analyst Tim Nollen is bracing for some rough results.
“We expect the new Linear standalone segment to continue to decline from the loss of pay TV subs, and advertising to remain weak,” Nollen said in a Friday note to investors. “We expect Disney+ subs to be flat [quarter over quarter], but expect [direct-to-consumer] losses to improve to ($288m) on lower content spending and other cost-cutting measures. Experiences (parks) growth will likely slow.”
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