Back to top

Image: Bigstock

Walt Disney (DIS) to Report Q3 Earnings: What's in the Cards?

Read MoreHide Full Article

The Walt Disney (DIS - Free Report) is set to report third-quarter fiscal 2021 results on Aug 12.

The Zacks Consensus Estimate for earnings has moved up 3.6% to 57 cents per share over the past 30 days, indicating an increase of 612.5% year over year.

The consensus mark for revenues is pegged at $16.8 billion, suggesting growth of 42.8% from the year-ago quarter’s reported figure.

Notably, the company’s earnings beat the Zacks Consensus Estimate in the trailing four quarters, the average surprise being 133.1%.
 
Let’s see how things have shaped up for this announcement.

The Walt Disney Company Price and EPS Surprise

The Walt Disney Company Price and EPS Surprise

The Walt Disney Company price-eps-surprise | The Walt Disney Company Quote

Factors to Consider

The addition of the Fox studio and TV assets and a controlling ownership in Hulu is expected to have bolstered Disney’s competitive positioning in the growing online video space of the media industry.

Additionally, slow recovery in theatrical exhibition is expected to have aided the top line as consumers began returning to theaters. Cruella was released in theaters and via Disney+ Premier Access on May 28.

However, limited operating capacity in theme parks, closure of cruise ship and slow yet resumed movie studio operations are expected to have remained a challenge in the to-be reported quarter.

Disney reopened two California theme parks on Apr 30, which followed the opening of Disney’s Grand Californian Hotel and Spa (Apr 29). Moreover, the Vacation Club Villa at the Grand Californian resumed operations in the to-be-reported quarter. California’s latest state guidelines permit parks to reopen with 15-35% capacity from Apr 1.

The Zacks Consensus Estimate for Parks, Experiences & Consumer Products revenues is currently pegged at $3.92 billion, indicating growth of 299.7% from the year-ago quarter when all the theme parks remained completely shut due to coronavirus outbreak.

The reopening is expected to have aided Parks, Experiences and Products segment’s top-line growth in the to-be-reported quarter.

Disney+’s Solid Content Portfolio Aids User Growth

The company is expected to have benefited from steady growth in global paid subscriptions across its portfolio of direct-to-consumer services including ESPN+ and Hulu, which reported 13.8 million and 41.6 million paid subscribers at the end of the fiscal second quarter.

Disney+, as of Apr 3, 2021, had 103.6 million paid subscribers compared with 33.5 million as of Mar 28, 2020. The company remains on track to achieve its prior guidance of 230-260 million paid subscribers by the end of fiscal 2024.

Solid content portfolio of Disney+ is expected to have helped this Zacks Rank #3 (Hold) company gain users in the to-be-reported quarter. Disney and Pixar’s Luca streamed directly on Disney+, beginning Jun 18. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

Disney+’s closest competitor Netflix (NFLX - Free Report) added 1.54 million paid subscribers globally in its second-quarter 2021. Netflix now has 209.18 million paid subscribers worldwide, up 21.9% year over year.

Additionally, AT&T’s (T - Free Report) HBO Max streaming service launched in May helped expand the overall pool of HBO and HBO Max customers by 47 million in the United States, and 67.5 million globally as of the second quarter of 2021. Moreover, since its nationwide release on Jul 15, Comcast’s (CMCSA - Free Report) Peacock witnessed 54 million sign-ups.

Disney’s deal with Comcast to bring Disney+ and ESPN+ to the cable provider’s Xfinity set top boxes and platforms and reach more than 20 million Comcast cable and Internet customers is expected to have been a game changer.

Published in