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Disney (DIS) Up 2.2% Since Last Earnings Report: Can It Continue?
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A month has gone by since the last earnings report for Walt Disney (DIS - Free Report) . Shares have added about 2.2% 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 the most recent earnings report in order to get a better handle on the important catalysts.
Disney Q4 Earnings Beat Estimates, Revenues Rise Y/Y
The Walt Disney Company 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%.
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.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended downward during the past month.
The consensus estimate has shifted -8.46% due to these changes.
VGM Scores
At this time, Disney has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with an F. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. 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. It's no surprise Disney has a Zacks Rank #5 (Strong Sell). We expect a below average return from the stock in the next few months.
Performance of an Industry Player
Disney is part of the Zacks Media Conglomerates industry. Over the past month, Paramount Global-B (PARA - Free Report) , a stock from the same industry, has gained 23.9%. The company reported its results for the quarter ended September 2023 more than a month ago.
Paramount Global-B reported revenues of $7.13 billion in the last reported quarter, representing a year-over-year change of +3.1%. EPS of $0.30 for the same period compares with $0.39 a year ago.
Paramount Global-B is expected to post earnings of $0.02 per share for the current quarter, representing a year-over-year change of -75%. Over the last 30 days, the Zacks Consensus Estimate remained unchanged.
Paramount Global-B has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of C.
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Disney (DIS) Up 2.2% Since Last Earnings Report: Can It Continue?
A month has gone by since the last earnings report for Walt Disney (DIS - Free Report) . Shares have added about 2.2% 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 the most recent earnings report in order to get a better handle on the important catalysts.
Disney Q4 Earnings Beat Estimates, Revenues Rise Y/Y
The Walt Disney Company 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%.
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.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended downward during the past month.
The consensus estimate has shifted -8.46% due to these changes.
VGM Scores
At this time, Disney has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with an F. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. 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. It's no surprise Disney has a Zacks Rank #5 (Strong Sell). We expect a below average return from the stock in the next few months.
Performance of an Industry Player
Disney is part of the Zacks Media Conglomerates industry. Over the past month, Paramount Global-B (PARA - Free Report) , a stock from the same industry, has gained 23.9%. The company reported its results for the quarter ended September 2023 more than a month ago.
Paramount Global-B reported revenues of $7.13 billion in the last reported quarter, representing a year-over-year change of +3.1%. EPS of $0.30 for the same period compares with $0.39 a year ago.
Paramount Global-B is expected to post earnings of $0.02 per share for the current quarter, representing a year-over-year change of -75%. Over the last 30 days, the Zacks Consensus Estimate remained unchanged.
Paramount Global-B has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of C.