The company, which operates the popular Disneyland theme park, is expected to reveal its September-quarter numbers on November 14, at 6:50 am ET. On average, analysts following the company forecast adjusted earnings of $1.1 per share, which represents a 34% increase from the year-ago period. Q4 revenue is expected to grow 5.6% annually to $22.44 billion.
Focus on Streaming
Disney’s streaming business continued to gather steam this year and turned profitable in the third quarter. There is a steady uptrend in the sports segment also, but the Parks & Experiences business in the domestic market faced pressure from higher costs amid increased technology spending and softness in consumer demand. The management sees a further improvement in the streaming segment’s profitability in the fourth quarter, with Entertainment DTC and ESPN+ expected to become profitable. It also forecasts a modest increase in Disney+ Core subscribers in Q4.
“We expect to see a flattish revenue number in Q4 coming out of the parks. And as we mentioned in — earlier in the letter, really just a few quarters. So, I don’t think I’d refer to it as protracted, but just a couple of quarters of likely similar results. Now keep in mind, we do have some expenses attached to our ships coming in, and that will affect us a bit in ’24 and a bit in ’25. But overall, I would just call this as a bit of a slowdown that’s being more than offset by the Entertainment business, both what we’ve seen so far and our expectations for Moana 2 as well as Mufasa,” said Disney’s CFO Hugh Johnston at the Q3 earnings call.
Key Numbers
In the third quarter, revenues increased 4% year-over-year to $23.2 billion and came in above the market’s projections. Q3 profit, excluding special items, grew sharply by 35% to $1.39 per share. Earnings beat the Street view for the fifth consecutive quarter. The Disney leadership recently said it expects adjusted earnings to grow 30% in fiscal 2024, on a per-share basis.
Net income attributable to the company was $2.62 billion or $1.43 per share in the third quarter, compared to a loss of $460 million or $0.25 per share in the year-ago quarter. During the quarter, the company achieved profitability across its combined streaming business for the first time.
Disney’s current stock price is broadly in line with the 12-month average. On Wednesday, the shares traded up 2% in the afternoon.