Disney (DIS) to Post Q3 Earnings: Key Factors to Consider

·3-min read

The Walt Disney Company’s DIS third-quarter fiscal 2022 results, set to be reported on Aug 10, are expected to have benefited from an expanding Disney+ subscriber base and revival in Parks, Experiences and Products businesses.

Disney+ has emerged as a key growth driver for Disney, primarily driven by its solid content portfolio. Disney’s focus on sports streaming, particularly live sports, is expected to drive growth for ESPN+.

Disney’s cheaper bundled services (Disney+, ESPN+ and Hulu) have been able to attract subscribers amid stiff competition from the likes of Netflix NFLX, Apple’s AAPL streaming service Apple TV+, Amazon Prime Video, HBO Max, Comcast’s CMCSA Peacock, Paramount+ and TikTok.

The Zacks Consensus Estimate for Disney+ is currently pegged at 148.703 million, indicating 28.2% growth from the figure reported in the year-ago quarter. The consensus mark for ESPN+ and Hulu is 23.986 million and 47.807 million, respectively, suggesting 61% and 11.7% growth from the figures reported in the year-ago quarter.

Our estimate for Disney+, ESPN+ and Hulu currently stands at 148.7 million, 23.8 million and 46.7 million, respectively.

The Walt Disney Company Revenue (TTM)

The Walt Disney Company Revenue (TTM)
The Walt Disney Company Revenue (TTM)

The Walt Disney Company revenue-ttm | The Walt Disney Company Quote

Streaming market leader Netflix reported better-than-expected second-quarter 2022 subscriber numbers. The streaming giant lost 0.97 million paid subscribers globally, lower than its estimate of losing two million users. Netflix had added 1.54 million paid subscribers in the year-ago quarter.

Apple’s streaming service, Apple TV+, continues to gain recognition with its critically acclaimed and popular shows like Ted Lasso. This year, Apple TV+ has earned 52 Emmy nominations, with the second season of Ted Lasso getting 20 nominations overall. Another show, Severance, has garnered 14 total nominations in its first season.

Click here to know how Disney’s overall third-quarter fiscal 2022 results are likely to be.

Theme Parks to Suffer from China Lockdowns

Disney’s domestic Theme Park business (Walt Disney World and Disneyland) is expected to have benefited from the availability of Star Wars: Galactic Starcruiser and Guardians of the Galaxy: Cosmic Rewind.

However, the closure of Asian parks (Shanghai and Hong Kong) is expected to have hurt profitability by roughly $300 million on a year-over-year basis.

Disney’s nearest peer, Comcast reported strong second-quarter 2022 results in its Theme Park business. Comcast generated Theme Park revenues of $1.8 billion, up 64.8% year over year, reflecting higher attendance and increases in guest spending at its parks in the U.S. and Japan.

The Zacks Consensus Estimate for Parks, Experiences & Consumer Products revenues is currently pegged at $6.73 billion, indicating growth of 54.6% year over year.

However, this Zacks Rank #3 (Hold) company’s advertising revenues are expected to have declined in the to-be-reported quarter. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The consensus estimates for advertising revenues – broadcasting and advertising revenues - cable is currently pegged at $854 million and $807 million, respectively, suggesting a 2.6% and 2.9% decline from the figure reported in the year-ago quarter.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Apple Inc. (AAPL) : Free Stock Analysis Report

Comcast Corporation (CMCSA) : Free Stock Analysis Report

Netflix, Inc. (NFLX) : Free Stock Analysis Report

The Walt Disney Company (DIS) : Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research