It has been about a month since the last earnings report for Walt Disney (DIS Quick QuoteDIS - Free Report) . Shares have added about 0.2% in that time frame, underperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Disney due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.

Disney Q2 Earnings Beat Estimates, Revenues Rise Y/Y

The Walt Disney Company reported second-quarter fiscal 2023 adjusted earnings of 93 cents per share, beating the Zacks Consensus Estimate by 4.49% but declining 13.9% year over year.

Revenues increased 13.3% year over year to $21.82 billion but missed the consensus mark by 0.03%.

Media and Entertainment Distribution (64.4% of revenues) revenues increased 3.1% year over year to $14.04 billion.

Revenues from Linear Networks declined 7% year over year to $6.63 billion. Direct-to-Consumer revenues increased 12.5% year over year to $5.51 billion. Content Sales/Licensing and Other revenues increased 17.7% year over year to $2.2 billion.

Parks, Experiences and Products revenues (35.6% of revenues) increased 17% year over year to $7.78 billion. Domestic revenues were $5.57 billion, up 13.8% year over year. International revenues jumped 106.3% year over year to $1.18 billion in the reported quarter.

Disney’s nearest peer, Comcast reported strong first-quarter 2023 results in its Theme Park business.

Comcast’s Theme Parks revenues increased 24.9% year over year to $1.95 billion, reflecting higher attendance and increases in guests.

Meanwhile, revenues from Disney’s Consumer Products decreased 13.6% year over year to $1.02 billion.

ESPN+ had 25.3 million paid subscribers at the end of the fiscal second quarter compared with 24.9 million at the end of the previous quarter.

Disney+, as of Apr 1, 2023, had 157.8 million paid subscribers compared with 161.8 million as of Dec 31, 2022.

Meanwhile, Disney’s Hulu ended the quarter with 48.2 million paid subscribers, up from 48 million reported in the year-ago quarter.

The average monthly revenue per paid subscriber for ESPN+ increased 2% year over year to $5.64.

The average monthly revenue per paid subscriber for Disney+ came in at $4.44, up 13% year over year.

The average monthly revenue per paid subscriber for Disney’s Hulu SVOD-only service decreased 6% year over year to $11.73.

The average monthly revenue per paid subscriber for Disney’s Hulu Live TV + SVOD service rose 5% from the year-ago quarter to $92.32.

Operating Details

Costs & expenses increased 10.7% year over year to $19.54 billion in the reported quarter.

Segmental operating income was $3.29 billion, down 11.2% year over year.

Media and Entertainment Distribution’s segmental operating income declined 42.4% year over year to $1.12 billion.

Linear Networks’ operating income decreased 35.1% to $1.83 billion.

Direct-to-Consumer operating loss was $659 million, narrower than the year-ago quarter’s loss of $887 million.

Content Sales/Licensing and Other operating losses were $50 million against an operating income of $16 million reported in the year-ago quarter.

Parks, Experiences and Products’ operating income was $2.17 billion, up 23.4% year over year.

The Domestic segment reported an operating income of $1.52 billion, up 9.7% year over year. The International segment reported an operating income of $156 million against an operating loss of $268 million reported in the year-ago quarter.

Consumer Products’ operating profit decreased 23% year over year to $491 million.

Balance Sheet

As of Apr 1, 2023, cash and cash equivalents were $10.4 billion compared with $8.47 billion as of Dec 31, 2022.

Total borrowings were $48.52 billion as of Apr 1, 2023 compared with $48.38 billion as of Dec 31, 2022.

Free cash flow was $1.99 billion in the reported quarter against free cash outflow of $2.16 billion in the previous quarter.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in estimates revision.

The consensus estimate has shifted -9.98% due to these changes.

VGM Scores

Currently, Disney has an average Growth Score of C, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Disney has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.