Walt Disney Company (The)

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Nov 102023

DIS: Disney Stock Jumps 7% on Quarterly Profit Beat, Prospects for Extra Cost Savings

Mickey Mouse is struggling to get out of this year’s slump. Shares just emerged with a 1.5% gain on the year, floating at their lowest levels since 2014.

  • Disney stock (ticker: DIS) rallied nearly 7% on Thursday after the company reported better-than-expected earnings data. For the July to September quarter, the entertainment giant posted revenue of $21.2bn, up 5% from the year-ago time span. It was slightly under Wall Street estimates of $21.4bn.
  • Bottom line, profits, arrived well above analysts’ consensus call. Earnings-per-share hit 82 cents, up a majestic 30% from a year ago and flying above the 71 cents eyeballed by the Street. To sweeten the deal, Disney revealed it expects to save an extra $2bn by cutting costs to a total of $7.5bn.
  • Share price has been attempting to get out of its sluggish performance. The recent spike helped Disney stock to turn up in the green for the year by a modest 1.5%. In the long run, it is languishing at lows last seen in 2014, posing a potentially lucrative deal for bargain hunters. That is, if Disney CEO Bob Iger’s ambitious expansion plans pan out.
Giorgio Trovato / Unsplash
Sep 202023

DIS: Disney Stock Drops 3.6% on $60B Parks Overhaul Announcement

Theme parks are getting a revamp while the entertainment giant is struggling to pull ahead in the streaming race.

  • Disney stock (ticker: DIS) tumbled 3.6% on Tuesday, after the company unveiled its next big investment. Double the initially planned size, Disney is pouring $60bn in its parks business. The expansion will unfurl over the next decade and will also cover the cruise line segment.
  • The real-life bet will take some of the pressure off Disney as it still struggles to churn out a profit from its streaming platform business. The theme parks picked up $8.3bn in revenue over the July quarter. The company’s streaming arm brought in $5.5bn in revenue for the same time span.
  • The news knocked Disney’s shares to the bottom of the Dow Jones Industrial Average on Tuesday. The entertainment giant isn’t entertaining its investors this year. Its stock is down about 8% since January and nearly 60% off from its all-time high of $198 a share in March 2021.
Illustration by TradingView
Aug 162023

DIS: Disney Slammed with Lawsuit Over Millions of Dollars Withheld from ‘Avatar’ Financier

TSG goes after Disney for alleged breach of contract, claiming the entertainment giant favored its streaming platform and boosted stock price.

  • Disney just got in trouble after big-shot Hollywood financier TSG filed a suit late on Tuesday. TSG claims that Disney’s studio has fast-tracked “Avatar: The Way of Water” and many other titles to its streaming platform Disney+, ultimately depriving the group “of hundreds of millions of dollars.”
  • The lawsuit goes on to say that Disney and its studio “have tried to use nearly every trick in the Hollywood accounting book” to boost their stock (ticker: DIS) at the expense of partners. For TSG, that translates to roughly $40mn as missed revenue after the firm requested an audit of three movies it helped finance.
  • And finally, TSG said it has spent about $3.3bn since 2012 to co-fund more than 140 movies such as “The Banshees of Inisherin,” “Gone Girl,” and “The Menu.” No word has been voiced out by Disney so far in what is shaping up to be a rare fight between a movie studio and its backer.
Aug 102023

DIS: Disney Stock Jumps 2% as CEO Bob Iger Vows to Crack Down on Password Sharing

The entertainment giant is also raising prices for streaming by more than 20% as revenue fell below consensus in Q2 and subscriber growth stalled.

  • Disney stock (ticker: DIS) traded up by 2.2% in off-hours markets on Thursday after the company reported a mixed bag of earnings. There’s a lot to unpack and CEO Bob Iger has made sure to please investors and boost that bottom line even if that means upsetting all of you free riders out there.
  • A few months after Netflix went on the hunt for unplugging subscribers plugged in a different household, Disney is doing the same – expect a crackdown on password sharing soon. On top of that, the streaming giant announced a price hike by more than 20% of the ad-free versions of both Disney+ and Hulu.
  • For the recent quarter, Disney reported 1% growth in its Disney+ subscriber base to 105.7mn. Total paid users across the company’s platforms landed at 154mn, slightly below analyst estimates. Revenue for the quarter was $22.3bn, up 4% from a year ago, and just under Wall Street forecast of $22.5bn.
USC Annenberg/ Flickr
May 122023

DIS: Disney’s Q2 Report Contains a Worrying Figure, Despite Sustained Profits

  • Disney’s recent quarterly report met earnings expectations, but reported a loss of 4m subscribers to Disney+.
  • They managed to avoid a profit dip through increased prices, but analysts worry this might not be sustainable.
  • Shares in Disney dropped by almost 9% yesterday with the report, but shares remain up by close to 4% since the year began.

Disney’s most recent quarterly report managed to be in line with analyst expectations, which is more than can be said for other streaming companies such as Netflix. It also reported that the loss it’s making on its streaming service has been reduced slightly from the previous quarter. Despite the positives however, analysts are concerned about a specific aspect of the report – relating to subscribers to its Disney+ service.

A bad omen?

The report contained that the service had lost some 4 million subscribers over the 3 month period – made only worse by the fact that analysts had been expecting an increase of around 1 million. Disney managed to avoid a dip in the profits generated by the service by increasing prices. Whether this approach will be sustainable in the long run however, is the question on investors’ minds. The news resulted in Disney shares dropping by close to 9% yesterday, as many believe this will impact its full-year performance. Since the start of the year, DIS has remained relatively flat with only a 3.74% increase.

(About Disney)
Disney, officially known as The Walt Disney Company, is a renowned and diversified multinational entertainment and media conglomerate. Founded by Walt Disney and Roy O. Disney in 1923, the company has gradually evolved into one of the world's leading entertainment brands. Disney operates through various segments, including Media Networks, Parks, Experiences and Products, Studio Entertainment, and Direct-to-Consumer & International. These segments encompass a vast array of businesses and assets, making Disney a dominant force in the entertainment industry.
Seif Ak / Unsplash
Mar 282023

DIS: Disney to Lay Off 7,000 Workers in Three Waves

The entertainment giant is embarking on a cost-cutting adventure in search of $5.5bn to stash in savings.

  • Walt Disney CEO Bob Iger set out a fast-track path toward a streamlined and more effective business model. The sweeping plan includes slashing 7,000 jobs across the company in three waves – one this week, one in April, and the final one rolling out before the summer.
  • The entertainment company announced upcoming job cuts back in February as it was figuring out ways to axe $5.5bn in costs to stem video-streaming losses. Disney is now eyeing a profit in streaming next year, amid looming competition in the cash-burning streaming sector.
  • Shares of Disney were fairly flat on Monday, closing the session higher by 1.6%. Since the job reduction was first floated last month, the company has erased roughly 15% of its valuation. Further, Iger is said to be looking into selling Disney’s stake in Hulu streaming service.
hyku, CC BY-SA 2.0 / Wikimedia Commons
Dec 202022

Not since 1974

2022 will go down in history as one of the worst years on record for Disney.

  • 2022 has become the worst year for Disney shares since 1974, with this year already having seen its price drop by 45%. Its 4.8% decline on Monday was also the largest decline on the Dow Jones that day.
  • Adding to its woes this year was the underwhelming release of Avatar: The Way of Water, which failed to live up to its opening revenue estimates – only pulling in $134m domestically and a highly disappointing $57m in China, which was expected to be one of the film’s largest markets.
  • Top Disney execs have said that covid has been a key reason for the stock’s decline, with government-messaging in some markets encouraging remaining at home and contributing to lowered cinema-interest. And despite many economies now having opened up, analysts have cut 20% from the company’s predicted 2023 earnings.
Dec 092022

The magic Disney needs?

2022 has been anything but magical for Disney, but its new strategy might make 2023 its comeback year.

  • Disney has launched the ad-supported version of its streaming service Disney+ in a push to bring in new revenue and make the service profitable. The media giant is following in the footsteps of Netflix, which already launched an ad-supported subscription in November to bolster revenue.
  • The launch has already attracted over 100 major advertisers including Marriott International and Mattel, with ads scheduled to take up around 4 minutes per hour of content. The new ad-supported subscription is priced at $7.99 compared to the ad-free subscription of $10.99.
  • This might be the magic Disney needs to get out of its 2022 slump. Aside from CEO Bob Chapek being ousted after less than two years in the role, its share price has taken a hammering – plummeting by more than 40% since the start of the year. Disney CFO, Christine McCarthy, expects the new service to have a “meaningful impact” on revenues in 2023 – here’s hoping.
Nov 212022

The old king is back in the castle

It’s musical chairs over a Disney HQ right now, with the return of the media giant’s old CEO leaving investors confused.

  • Bob Iger has returned as the CEO of Disney despite having picked Bob Chapek as his successor less than two years ago – the upheaval comes just as Chapek was planning significant cost-cuts to offset spending on the company’s streaming service Disney+. Shares in Disney are down by more than 40% YTD, so investors are very much hoping for a white knight to save the day.
  • Chapek’s decisions whilst CEO of the company are now in the spotlight. Iger strongly disagreed with his decision to raise the price of Disney+ to $10.99 a month – making it more expensive than most of its competitors. This might well be one of the first changes to come under Iger’s renewed reign.
  • That being said, there’s not much more room for spending on its streaming business – Disney shocked investors earlier this month with news that Disney+ had accrued operating losses of $1.5bn, up $800m, thanks to higher marketing and content spending. So whilst Iger might want to lower prices, he’s gonna have to find the money somewhere, or investors will be less than happy.
USC Annenberg/ Flickr
Nov 092022

Disney investors want off this ride

You ever seen a kid at Disneyland stepping off Space Mountain, hopped up on hot fudge sundaes and slowly turning green? Well, Disney investors feel a bit like that.

  • Disney stock fell over 8% in extended trading on Tuesday after falling short of expectations for profit and key revenue segments during fiscal Q4 in both its parks and media businesses. The entertainment brand reported EPS of $0.30 on revenues of $20.15bn, with media revenue declining 3%, along with FY revenue growth of 22%.
  • Disney+ subscriber growth was a bright spot, adding 12.1m subscribers in the quarter to beat expectations and take its total to 164.2m. However, Disney forecast slowing subscriber growth in Q1 together with lower content sales, though is expecting the segment to reach profitability in fiscal 2024 – which failed to ease concerns around the direct-to-consumer business.
  • There was both good news and bad news out of its Parks unit. On the plus side, the company reported record results in that segment and saw revenue growth of 34%, but on the down side that was still well shy of expectations after feeling the sting of macro pressures. The after hours drop was partly due to a declining broader market, partly because these results just weren’t good enough for investors.
See all reported financials
Erin With / Unsplash
Aug 112022

Hot diggity dog look at those earnings

Disney does what Disney does best and releases a little bit of magic into the world, this time in the form of its latest earrings report.

  • Disney shares popped around 7% in extended trading on Wednesday after its latest earnings report boasted a beat on both ends, blowing past estimates with EPS of $1.09 on revenues that jumped 26% from the same time last year to hit $21.5bn – increased spending at its US theme parks was a large driver of the impressive growth.
  • Disney+ was the triumphant flag at the top of the castle tho and managed to buck a slowdown in the streaming world this szn. Disney+ added 14.4m subscribers in the quarter, which is over 45% more than analysts were expecting and takes its total worldwide subscriber count to a whopping 221m – taking over Netflix for the first time.
  • That being said, the brand agreed with competitors’ sentiments regarding rising costs and it lost $1.1bn across all its streaming services. It plans to raise prices across the board to try and make its streaming business profitable by the end of 2024, but it also lowered its 2024 subscriber guidance, hinting that the streaming market could be approaching saturation after all.
See all reported financials
Mika Baumeister / Unsplash
May 122022

The Disney castle has a few hidden cracks

Disney’s castle is standing tall, with a strong streaming spire and a flourishing parks wing – but shares take a dip in the red after the media empire tempers its outlook.

  • Disney shares slumped 3% in extended trading on Wednesday to erase all of its pandemic gains – down over 30% since January. It came on the back of a Q1 miss, reporting EPS of $1.08 on revenues that were up 23% at $19.25bn – that includes a $1bn hit for ending license deals early, and it may have met estimates if not for that.
  • Theme parks revenue more than doubled to $6.7bn, bouncing back in a big way from covid and seeing increased attendance and more hotel and cruise bookings. But, the segment has been hurt by lockdowns in China that could leave a $350m mark. As we all know, travel is booming, so perhaps that can help make up for the loss.
  • It avoided Netflix’s fate by smashing its streaming numbers. Disney added 7.9m subscribers to beat estimates with a new total of 137.7m, and each of those are bringing in over 5% more revenue. However, outlook was tepid and expects net additions to slow in the second half of the year and production and content costs to eat into revenues.
See all reported financials
Mahdis mousavi / Unsplash
Apr 212022

Disney gets dragged into politics

Disney could be about to lose some of its magic to politics as the Florida government mixes business with pleasure.

  • Disney World in FL has been a “special district” since 1967, meaning it has the authority to basically act as its own little country, boasting unique tax laws and the ability to run its own emergency services and city planning (that’s why they have no potholes) – but it could be about to lose that status.
  • The brand has been opposing a piece of legislation from Florida’s government, and let’s just say Republican Gov. Ron DeSantis ain’t happy about it. Disney’s unique tax laws save it tens of millions of dollars a year and help it run smoothly and efficiently, but its employees are vehemently against the bill, so the company is kinda stuck rn.
  • Streaming platforms were streaming with tears yesterday after Netflix nuked the market with earnings, losing $54bn in market cap and wiping 35% off its share price in its biggest one-day drop ever, and other streaming platforms sank in sympathy – Disney and Roku both lost around 6%, and Paramount declined 8.6%.
Brian McGowan / Unsplash
Mar 072022

Disney adds another tier to its castle

Disney’s streaming platform plans to add a new, cheaper tier to its subscription options.

🔍 Key points:

  • Disney Plus is adding an ad-supported tier sometime later this year for the first time, starting with the U.S. with plans to expand internationally.
  • The move is a “building block” for the company’s plans to hit up to 260m subscribers by the end of fiscal 2024 (up from 129.8m at the end of 2021), which is increasingly important for Disney as it watches subscriber growth slow in recent quarters.
  • Ad-supported options have become increasingly popular for streaming sites as competition in the industry hits new highs, and Disney follows the likes of NBC, Discovery, Paramount, and even Amazon in offering free streaming tiers with ads – will Netflix and Apple be next?
Thibault Penin / Unsplash
Feb 102022

Disney’s show stopping earnings

There’s much fanfare in Disneyland after a dazzling fiscal Q1 show from both of its core businesses.

Key points:
  • The stock popped 7% in Thursday morning trading after it easily topped on both ends. It reported EPS of $1.06 (vs $0.63 expected) on revenues that were up 34% y-o-y to hit $21.82bn (vs the $20.91bn expected).
  • Its media division grew 15% to $14.5bn, largely thanks to Disney+, which beat estimates with 129.8m total subscribers – it’s splashing the big bucks on content for Q4 2022 and CEO Bob Chapek reiterated their goal of having between 230m and 260m subscribers by 2024.
  • Its parks business got love’s true kiss and came back to life. The division posted record revenues that had more than doubled y-o-y to hit $7.2bn thanks to a flood of people coming to their theme parks, booking hotels and going on cruises thanks to fewer covid restrictions.
See all reported financials
Jayme McColgan / Unsplash
Nov 112021

Disney goes "Minnie"

Disney disappoints with earnings, struggling to attract subscribers to a slowing streaming service.

  • Disney missed estimates across the board in Q3 and the poor performance sent prices down 4% after-hours.
  • Disney+ has lost its magic despite becoming a key growth driver during Covid, adding just 2.1m subscribers compared to ambitious estimates of 9.4m.
  • Theme parks were the bright spot in a dark quarter, making a comeback as travel picked up and seeing revenue double from Q3 last year.
  • Disney still forecasts 260m subscribers by 2024 – there are currently 118.1m.
  • Analysts don’t think that’s realistic and Disney got its first downgrade of the year from Barclays this week.
Aug 132021

Disney's fairytale earnings

Disney reports blowout Q3 earnings (its fiscal year runs September to September), beating expectations on both the top and bottom lines thanks to the burgeoning Disney+ and the reopening of its theme parks.

Disney reported some fairytale earnings on Thursday, leaping ahead of expectations on the back of its rapidly growing streaming service and the reopening of theme parks as restrictions are lifted around the country. The media giant reported earnings per share of $0.80 on revenue of $17.02 billion, compared to the $0.55 in earnings per share on revenue of $16.76 billion that analysts were expecting. The industry behemoth also smashed subscriber estimates for Disney+ in the third fiscal quarter, reporting 116 million compared to estimates of 114.5 million, and up significantly from the 103.6 million the company boasted last quarter – its total addressable market is now up to 1.1 billion households across the world.

The results should go some way towards easing investor concerns regarding Disney’s post-pandemic rebound. Many streaming services have struggled as restrictions ease and fewer people are locked at home desperately searching for entertainment of an evening. The solid report can also be attributed to the reopening of theme parks across the country, which prompted a threefold increase in the segments’ revenue numbers.

We’ve only just begun our journey and as I think you see what’s really going to make the difference for Disney is our spectacular content, told by the best storytellers, against our powerhouse franchises. In terms of the impact of the Delta variant, we see strong demand for our parks continuing. The primary noise that we’re seeing right now is really around group or convention cancellations …But on the whole, we see really strong demand for our parks,

said CEO Bob Chapek.
May 132021

Hi ho, hi ho, it's off to work we go...

Disney investors are certainly not in the happiest place on earth after seeing the company’s latest earnings, which disappointed on subscriber growth but gave some hope on the back of strong demand for its recently reopened theme parks.

The media company reported lower-than-expected second quarter earnings, with poor revenues and disappointing subscriber growth. Disney reported earnings per share of $0.79 on revenues of $15.61 billion, compared to expectations of $0.27 in earnings per share on revenue of $15.87 billion.

The company’s streaming service, Disney+, has been boosting the business during the pandemic as almost everything else was forced to shut, but it seems growth on the platform is already starting to slow. Average monthly revenue per streamer dipped almost 30% from last year, and paid subscriber numbers were also a swing and a miss, coming in at 103.6 million versus expectations of 109 million. Disney still hopes to see between 230 million and 260 million Disney+ subscribers by 2024 though, or so it says.

(Disney+) growth is significantly decelerating as the initial pandemic boost has waned,

said eMarketer analyst Eric Haggstrom.

Given Disney's content investments, subscriber growth should return strongly once this short-term turbulence ends.

So there is hope. Investors can also rest easy knowing that Disney’s theme parks have been back up and running since April 30th, receiving a super positive customer response and solid booking numbers. Revenues from this recovery should come out more clearly in Q3 earnings, so watch this space. The theme parks segment posted an operating loss of $406 million this quarter though, understandably, as its Disneyland California and Paris parks were shut for the full three months.

This quarter’s numbers were exactly as we projected internally, so no disappointment here,

said CEO Bob Chapek.

We’re pleased to see more encouraging signs of recovery across our businesses, and we remain focused on ramping up our operations while also fueling long-term growth for the Company. This is clearly reflected in the reopening of our theme parks and resorts, increased production at our studios, the continued success of our streaming services, and the expansion of our unrivaled portfolio of multi year sports rights deals for ESPN and ESPN+.