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Disney (DIS) Q4 Earnings Beat Estimates, Revenues Rise Y/Y
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The Walt Disney Company (DIS - Free Report) reported fourth-quarter fiscal 2023 adjusted earnings of 82 cents per share, which beat the Zacks Consensus Estimate by 22.39% and increased 173.3% year over year.
Revenues increased 5.4% year over year to $21.24 billion but missed the consensus mark by 0.36%.
Shares of Disney have declined 2.7% year to date against the Zacks Consumer Discretionary sector’s rise of 6.1%.
The Walt Disney Company Price, Consensus and EPS Surprise
Media and Entertainment Distribution (44.8% of revenues) revenues increased 2.5% year over year to $6.52 billion.
Revenues from Linear Networks declined 9.1% year over year to $2.62 billion. Direct-to-Consumer revenues increased 12.1% year over year to $5.03 billion. Content Sales/Licensing and Other revenues decreased 2.5% year over year to $1.86 billion.
Parks, Experiences and Products revenues (38.4% of revenues) increased 12.5% year over year to $8.16 billion. Domestic revenues were $5.38 billion, up 7.5% year over year. International revenues jumped 55% year over year to $1.66 billion in the reported quarter.
Meanwhile, revenues from Disney’s Consumer Products decreased 5% year over year to $1.11 billion.
Subscriber Details
Disney+, as of Sep 30, 2023, had 150 million paid subscribers compared with 146.7 million as of Jul 1, 2023.
Disney+ added nearly seven million core subscribers in the fourth quarter. Key streaming content in the quarter included theatrical titles like Elemental, Little Mermaid and Guardians of the Galaxy Vol. 3., original series like Ahsoka and the Korean original series, such as Moving.
Meanwhile, Disney’s Hulu ended the quarter with 48.5 million paid subscribers, up from 48.3 million reported in the previous quarter.
ESPN+ had 26 million paid subscribers at the end of the fiscal fourth quarter compared with 25.2 million at the end of the previous quarter. Domestic ESPN revenues and operating income grew year over year in both fiscal year 2022 and fiscal year 2023, demonstrating the value of sports and the power of the ESPN brand.
Domestic Disney+ average monthly revenue per paid subscriber increased from $7.31 to $7.50 due to higher advertising revenues.
International Disney+ (excluding Disney+ Hotstar) average monthly revenue per paid subscriber increased from $6.01 to $6.10 due to an improvement in average retail pricing, partially offset by a higher mix of subscribers to promotional offerings.
Hulu SVOD’s only average monthly revenue per paid subscriber decreased from $12.39 to $12.11, primarily due to lower advertising revenues and a higher mix of subscribers to multi-product offerings.
Hulu Live TV + SVOD average monthly revenue per paid subscriber decreased from $91.80 to $90.08, primarily due to lower advertising revenues.
The average monthly revenues per paid subscriber for ESPN+ decreased 2% year over year to $5.34.
Operating Details
Costs & expenses decreased 2.3% year over year to $19.15 billion in the reported quarter.
Segmental operating income was $2.97 billion, up 86.3% year over year.
Media and Entertainment Distribution’s segmental operating income declined 138.8% year over year to $236 million.
Linear Networks’ operating income decreased 0.1% to $805 million.
Direct-to-Consumer operating loss was $420 million, narrower than the year-ago quarter’s loss of $1.4 billion.
Content Sales/Licensing and Other operating losses were $149 million compared with an operating loss of $8 million reported in the year-ago quarter.
Parks, Experiences and Products’ operating income was $1.75 billion, up 31.1% year over year.
The Domestic segment reported an operating income of $808 million, up 9% year over year. The International segment reported an operating income of $441 million compared with $74 million reported in the year-ago quarter.
Consumer Products’ operating profit decreased 3.2% year over year to $510 million.
Balance Sheet
As of Sep 30, 2023, cash and cash equivalents were $14.1 billion compared with $11.46 billion as of Jul 1, 2023.
Total borrowings were $42.1 billion as of Sep 30, 2023 compared with $47.19 billion as of Jul 1, 2023.
Free cash flow was $3.42 billion in the reported quarter compared with free cash flow of $1.64 billion in the previous quarter.
Guidance
The company expects free cash flow to increase significantly in fiscal 2024 from fiscal 2023, approaching levels last seen prior to the pandemic.
The company continues to expect the combined streaming businesses to reach profitability in the fourth quarter of fiscal 2024.
Zacks Rank & Stocks to Consider
Disney currently has a Zacks Rank #4 (Sell).
NetEase (NTES - Free Report) , AST SpaceMobile (ASTS - Free Report) and Genius Sports Limited (GENI - Free Report) are some better-ranked stocks that investors can consider in the broader Consumer Discretionary sector.
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Disney (DIS) Q4 Earnings Beat Estimates, Revenues Rise Y/Y
The Walt Disney Company (DIS - Free Report) reported fourth-quarter fiscal 2023 adjusted earnings of 82 cents per share, which beat the Zacks Consensus Estimate by 22.39% and increased 173.3% year over year.
Revenues increased 5.4% year over year to $21.24 billion but missed the consensus mark by 0.36%.
Shares of Disney have declined 2.7% year to date against the Zacks Consumer Discretionary sector’s rise of 6.1%.
The Walt Disney Company Price, Consensus and EPS Surprise
The Walt Disney Company price-consensus-eps-surprise-chart | The Walt Disney Company Quote
Segment Details
Media and Entertainment Distribution (44.8% of revenues) revenues increased 2.5% year over year to $6.52 billion.
Revenues from Linear Networks declined 9.1% year over year to $2.62 billion. Direct-to-Consumer revenues increased 12.1% year over year to $5.03 billion. Content Sales/Licensing and Other revenues decreased 2.5% year over year to $1.86 billion.
Parks, Experiences and Products revenues (38.4% of revenues) increased 12.5% year over year to $8.16 billion. Domestic revenues were $5.38 billion, up 7.5% year over year. International revenues jumped 55% year over year to $1.66 billion in the reported quarter.
Meanwhile, revenues from Disney’s Consumer Products decreased 5% year over year to $1.11 billion.
Subscriber Details
Disney+, as of Sep 30, 2023, had 150 million paid subscribers compared with 146.7 million as of Jul 1, 2023.
Disney+ added nearly seven million core subscribers in the fourth quarter. Key streaming content in the quarter included theatrical titles like Elemental, Little Mermaid and Guardians of the Galaxy Vol. 3., original series like Ahsoka and the Korean original series, such as Moving.
Meanwhile, Disney’s Hulu ended the quarter with 48.5 million paid subscribers, up from 48.3 million reported in the previous quarter.
ESPN+ had 26 million paid subscribers at the end of the fiscal fourth quarter compared with 25.2 million at the end of the previous quarter. Domestic ESPN revenues and operating income grew year over year in both fiscal year 2022 and fiscal year 2023, demonstrating the value of sports and the power of the ESPN brand.
Domestic Disney+ average monthly revenue per paid subscriber increased from $7.31 to $7.50 due to higher advertising revenues.
International Disney+ (excluding Disney+ Hotstar) average monthly revenue per paid subscriber increased from $6.01 to $6.10 due to an improvement in average retail pricing, partially offset by a higher mix of subscribers to promotional offerings.
Hulu SVOD’s only average monthly revenue per paid subscriber decreased from $12.39 to $12.11, primarily due to lower advertising revenues and a higher mix of subscribers to multi-product offerings.
Hulu Live TV + SVOD average monthly revenue per paid subscriber decreased from $91.80 to $90.08, primarily due to lower advertising revenues.
The average monthly revenues per paid subscriber for ESPN+ decreased 2% year over year to $5.34.
Operating Details
Costs & expenses decreased 2.3% year over year to $19.15 billion in the reported quarter.
Segmental operating income was $2.97 billion, up 86.3% year over year.
Media and Entertainment Distribution’s segmental operating income declined 138.8% year over year to $236 million.
Linear Networks’ operating income decreased 0.1% to $805 million.
Direct-to-Consumer operating loss was $420 million, narrower than the year-ago quarter’s loss of $1.4 billion.
Content Sales/Licensing and Other operating losses were $149 million compared with an operating loss of $8 million reported in the year-ago quarter.
Parks, Experiences and Products’ operating income was $1.75 billion, up 31.1% year over year.
The Domestic segment reported an operating income of $808 million, up 9% year over year. The International segment reported an operating income of $441 million compared with $74 million reported in the year-ago quarter.
Consumer Products’ operating profit decreased 3.2% year over year to $510 million.
Balance Sheet
As of Sep 30, 2023, cash and cash equivalents were $14.1 billion compared with $11.46 billion as of Jul 1, 2023.
Total borrowings were $42.1 billion as of Sep 30, 2023 compared with $47.19 billion as of Jul 1, 2023.
Free cash flow was $3.42 billion in the reported quarter compared with free cash flow of $1.64 billion in the previous quarter.
Guidance
The company expects free cash flow to increase significantly in fiscal 2024 from fiscal 2023, approaching levels last seen prior to the pandemic.
The company continues to expect the combined streaming businesses to reach profitability in the fourth quarter of fiscal 2024.
Zacks Rank & Stocks to Consider
Disney currently has a Zacks Rank #4 (Sell).
NetEase (NTES - Free Report) , AST SpaceMobile (ASTS - Free Report) and Genius Sports Limited (GENI - Free Report) are some better-ranked stocks that investors can consider in the broader Consumer Discretionary sector.
NTES sports a Zacks Rank #1 (Strong Buy), and ASTS and GENI carry a Zacks Rank #2 (Buy) each at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Shares of NetEase have gained 55.2% year to date. NTES is set to report its third-quarter 2023 results on Nov 16.
Shares of AST SpaceMobile have declined 14.1% year to date. ASTS is slated to report its third-quarter 2023 results on Nov 13.
Shares of Genius Sports Limited have gained 48.5% year to date. GENI is set to report its third-quarter 2023 results on Nov 13.