Entertainment behemoth The Walt Disney Company (NYSE: DIS) is scheduled to report fourth-quarter results on the morning of November 14, after turning its streaming business profitable in the previous quarter. Disney Studios has an impressive lineup of movies for release in the coming months, after a series of successful releases.
The performance of Disney’s stock has not been encouraging in recent years as it struggled to maintain momentum. Meanwhile, considering the relatively low valuation and strong prospects of the company’s streaming business, DIS is unlikely to disappoint long-term investors. It has been investing heavily in its direct-to-consumer streaming operations, lately.
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.