The “Partners” statue of Walt Disney and Mickey Mouse, at Cinderella Castle in Magic Kingdom, at Walt Disney World, in Lake Buena Vista, Florida, photographed on 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 ongoing turnaround since Bob Iger returned as CEO in 2022, particularly results from the company's streaming and theme park businesses.
Here's what Wall Street expects Disney to report, according to LSEG:
- Earnings per share: $1.19 is expected
- Revenue: 23.071 billion dollars are expected
In the streaming space, Disney+ and Hulu both 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; meanwhile, ESPN+ subscribers 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 since 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, “continued losses at ESPN+ and weak guidance… suggest a difficult road ahead,” said Paul Verna, eMarketer's vice president of content.
During the company's last earnings call, executives cautioned that they did not expect to see more customers in the third quarter, but anticipated a return to growth in the fourth quarter.
While ESPN+ has weighed down Disney’s streaming unit, its network counterpart remains a bright spot for the company’s traditional TV business. That traditional TV business, however, is expected to plummet as customers continue to cut the cord on pay-TV packages.
Meanwhile, Disney's theme park division is also a key focus, as it has been the driver of the company's profits. The status of Disney's specific U.S. parks will be of particular interest.
Disney has pledged to spend $60 billion on investments in its theme parks over the next decade, a clear sign of the importance of the business.
In the latest quarter, revenue for the U.S. parks and experiences division rose 7% to $5.96 billion, and international sales rose 29% to $1.52 billion due to increased attendance and pricing at Hong Kong Disneyland Resort. Emarketer's Verna expects the parks' “positive momentum” to continue.
However, California's Disneyland Resort came under pressure from a decline in profits. Executives had attributed the year-over-year decline to cost inflation, including high labor expenses.
Last month ComcastComcast's earnings were weighed down by its Universal theme parks, which the company attributed to increased competition from cruise ships and international tourism. Despite this, Comcast executives said they remained “optimistic” about the business, especially with a new theme park opening in 2025.
Disclosure: Comcast owns NBCUniversal, the parent company of CNBC.
