Lots of Disney News Heading Into the Earnings Calls

 by Ray Keating

News/Analysis

DisneyBizJournal.com

February 6, 2024

 

Heading into the company’s February 7 earnings call, there’s plenty of news swirling around the Walt Disney Company.

 

First, another big-time activist investor group – Blackwells Capital – is tossing board nominees into the ring for the April 3 shareholder meeting. Blackwells wants to expand the number of board seats, and is talking about the possibility of breaking up Disney into three public companies, according to Reuters. Does anyone else detect an early-1980s vibe here, given Disney’s recent terrible stock performance?

 

This, of course, in addition to Nelson Peltz's Trian Fund Management effort to replace Disney board members.

Second, news broke on February 6 that ESPN, Fox and Warner Brothers are going to team up to establish a mega-sports streaming service. Each company would own a one-third share of the joint venture. According to the press release from Disney, “The platform would aggregate content to offer fans an extensive, dynamic lineup of sports content, aiming to provide a new and differentiated experience to serve sports fans, particularly those outside of the traditional pay TV bundle. By subscribing to this focused, all-in-one premier sports service, fans would have access to the linear sports networks including ESPN, ESPN2, ESPNU, SECN, ACCN, ESPNEWS, ABC, FOX, FS1, FS2, BTN, TNT, TBS, truTV, as well as ESPN+.”

 

Disney CEO Bob Iger said, “The launch of this new streaming sports service is a significant moment for Disney and ESPN, a major win for sports fans, and an important step forward for the media business. This means the full suite of ESPN channels will be available to consumers alongside the sports programming of other industry leaders as part of a differentiated sports-centric service.”

 

Pricing and other details will be forthcoming. 

 

But one has to wonder if this type of joint venture will attract attention from Washington’s antitrust activist regulators.

 

Third, Gina Carano is back. But not in The Mandalorian. She’s in the courtroom, and Elon Musk is at her side. Carano is suing Disney for her firing from the streaming show, and Musk’s company X is funding the lawsuit, according to CNBC. As reported by CNBC: “The suit, which alleges wrongful discharge and sex discrimination, seeks Carano’s reinstatement in ‘The Mandalorian,’ and monetary damages for the loss of her past pay and her future employment as a result of her termination. Carano was booted from the series after she shared a post on Instagram and TikTok that implied conservatives in the U.S. were being treated like Jewish people in Nazi Germany.”

 

Finally, Disney has brought in a big thinker to help people with their board votes – Professor Ludwig Von Drake. The Hollywood Reporter noted: “The media and entertainment giant released an animated video Monday urging shareholders to vote, but only for the company’s preferred board members. The Austrian duck, who is uncle to Donald and an expert on many subjects in the Disney universe, guides the shareholders through the voting process that kicks off ahead of the April 3 shareholder meeting.”

 

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Ray Keating is the editor, publisher and economist for DisneyBizJournal.com; and author of the Pastor Stephen Grant thrillers and mysteries, the Alliance of Saint Michael novels, and assorted nonfiction books. Have Ray Keating speak your group, business, school, church, or organization. Email him at raykeating@keatingreports.com.

 

The views expressed here are his own – after all, no one else should be held responsible for this stuff, right?

 

Support the Daily Dose of Disney with Ray Keating Podcast at https://www.buzzsprout.com/1724143. Subscribe at the $8 or $10 level, and get The Disney Planner: The TO DO List Solution by Ray Keating. Remain a supporter and you'll get a FREE BOOK by Ray Keating every six months going forward. Thanks!

 

The Disney Planner: The TO DO List Solution combines a simple, powerful system for getting things done with encouragement and fun for Disney fans, including those who love Mickey, Marvel, Star Wars, Indiana Jones, Pixar, princesses and more.

 

Consider other books by Ray Keating, including…

 

• The Pastor Stephen Grant thrillers and mysteries. There are 18 books in the series now.

 

• Pre-order The Weekly Economist III: Another 52 Quick Reads to Help You Think Like an Economist. Signed books here and Kindle editions here.

 

• Order The Weekly Economist II: 52 More Quick Reads to Help You Think Like an Economist. Signed books here.  And Kindle and paperback editions here.

 

• The Weekly Economist: 52 Quick Reads to Help You Think Like an Economist. Signed paperbacks at RayKeatingOnline.com or paperbacks, hardcovers and Kindle editions at Amazon.com.

 

• Cathedral: An Alliance of Saint Michael Novel is at Amazon. 

 

• The Lutheran Planner: The TO DO List Solution combines a simple, powerful system for getting things done with encouragement, inspiration and consolation from the Christian faith.

 

• Signed editions of Ray’s books are at www.raykeatingbooksandmore.com. 

 

Also, check out Ray’s podcasts – the Daily Dose of Disney, Free Enterprise in Three Minutes, and the PRESS CLUB C Podcast.

Disney Earnings Beat Market Expectations and Iger Emphasizes Shift from Fixing to Building

 by Ray Keating

News

DisneyBizJournal.com

November 8, 2023

 

The Walt Disney Company published its fourth quarter and full year earnings for 2023 today, and the company generally beat market expectations. It also was reiterated on the call that management would recommend to the board that a Disney dividend should be established, or re-established, by the end of the calendar year.

The company’s diluted earnings per share, excluding certain items, for the quarter increased to $0.82 from the prior-year quarter’s $0.30, and for the entire year, diluted EPS, excluding certain items, came in at $3.76 in 2023 versus $3.53 in the prior year.

 

For good measure, revenues were up by 5 percent in the quarter, and by 7 percent for the year, compared to the same previous periods.

 

Also, Disney+ added 6.9 million core subscribers in the fourth quarter, which far exceeded market expectations. In addition, streaming losses fell dramatically – from $1.47 billion a year earlier to $387 million in this quarter – with profitability on target for the fourth quarter of 2024.

 

Disney+ core subscribers came in at 112.6 million, with total Hulu subscribers at 48.5 million and ESPN+ at 26.0 million – both up slightly.

 

The Experiences division – parks and consumer products – saw a 13 percent increase in revenues and a 31 percent increase in operating income in the quarter.

 

Disney CEO Bob Iger noted the benefits of the company’s new structure, and spoke of “restored creativity.” He also emphasized that the company was moving from “fixing” matters due to past decisions and industry changes to “building” in four key areas. 

 

The first path for building is streaming profitability, pointing out that 50 percent of new Disney+ subscribers chose the advertising option, and that a unified Disney+ and Hulu app would be set up in beta form in December and officially launched in early spring 2024.

 

The second path is making ESPN the preeminent sports platform, including via new strategic partnerships. Iger emphasized that ESPN was experiencing solid revenue and income growth.

 

The third is a kind of refocus of the movie studio, namely, a move away from quantity and to a focus on quality. Iger, while noting successes, did acknowledge a slip in quality.

 

And fourth, Iger spoke of “turbo-charging” growth in experiences, that is, parks, cruise lines, etc. Previously announced investments were noted, as were improved guest experience ratings.

 

In after-hours trading, at the end of the Disney earnings call, the stock price was up by better than three percent.

 

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Ray Keating is the editor, publisher and economist for DisneyBizJournal.com; and author of the Pastor Stephen Grant thrillers and mysteries, the Alliance of Saint Michael novels, and assorted nonfiction books. Have Ray Keating speak your group, business, school, church, or organization. Email him at raykeating@keatingreports.com.

 

The views expressed here are his own – after all, no one else should be held responsible for this stuff, right?

 

Support the Daily Dose of Disney with Ray Keating Podcast at https://www.buzzsprout.com/1724143. Subscribe at the $8 or $10 level, and get The Disney Planner: The TO DO List Solution by Ray Keating. Remain a supporter and you'll get a FREE BOOK by Ray Keating every six months going forward. Thanks!

 

Consider books by Ray Keating, including…

 

• The Pastor Stephen Grant thrillers and mysteries. There are 18 books in the series now.

 

• Order The Weekly Economist II: 52 More Quick Reads to Help You Think Like an Economist. Kindle editions and paperbacks via Amazon here and signed books here. And don’t forget the first book in this growing series, i.e., The Weekly Economist: 52 Quick Reads to Help You Think Like an Economist at Amazon.com.

 

• Cathedral: An Alliance of Saint Michael Novel is at Amazon. 

 

• The Lutheran Planner: The TO DO List Solution combines a simple, powerful system for getting things done with encouragement, inspiration and consolation from the Christian faith.

 

• Signed editions of Ray’s books are at www.RayKeatingOnline.com. 

 

Also, check out Ray’s podcasts – the Daily Dose of Disney, Free Enterprise in Three Minutes, and the PRESS CLUB C Podcast.

Iger’s First Post-Chapek Earnings Call Amidst Assorted Challenges

 by Ray Keating

News/Analysis

DisneyBizJournal.com

February 7, 2023

 

The Walt Disney Company’s earnings report and call for the quarter that ended in December of last year comes tomorrow (February 8) in the midst of a flurry of activity by and targeted at the company.

 

Of course, this is the first earnings call in the Iger II-post-Chapek period. Although, the quarter being reported covered both Chapek and Iger in the CEO driver’s seat, and Iger will be providing some forward-looking guidance.

As for the flurry of activity, there’s Nelson Peltz vying for a seat on the Disney board. Peltz’s Trian Partners has accumulated about $1 billion worth of Disney stock. But Trian’s campaign to get Peltz or his son a seat is opposed by the current Disney board. While Peltz has some points, there seems to be little excitement about his board campaign other than from Peltz.

 

Iger has challenges even beyond contributing to the search for his own successor. In a February 2 letter to shareholders, the Disney Board noted, “The Board is overseeing important strategic changes that our CEO Bob Iger is executing, such as putting more decision-making into the creative teams, implementing a cost reduction plan, prioritizing streaming profitability and improving the guest experience in our parks.” Cuts and restructuring promise to be painful, with the hope, of course, that the company is better positioned going forward. 

 

At the same time, Iger needs to deal with improving the experience of customers (or guests) at the parks, even as members of a key Walt Disney World union just overwhelmingly voted down a contract. 

 

Oh yes, and there are those uncertainties about whether or not the U.S. will slip back into recession in 2023.

 

For good measure, Florida state legislators are just about to fulfill Governor Ron DeSantis’s attack on Disney by turning over control of the Reedy Creek Improvement District, an entity that basically has allowed Disney to self-govern the land upon which Disney World sits since 1967, to a board selected by the governor, with approval from the state senate. That inevitably will slow development down and raise costs for Disney, and depending upon who sits on the board, could create additional headaches for the company.

 

Also, on the streaming front, The New York Times has reported, “Analysts polled by FactSet estimate that Disney+ will have 163 million subscribers, a slight erosion from the previous quarter.” However, as widely noted, the top focus across the streaming industry now has become profitability, with the question being which streaming platforms are dealing with costs so as to provide shareholders and consumers benefits now and into the future, and which ones are miscalculating due to short-run worries.

 

And as for Disney’s movie business, it’s a mixed story. There’s good news, of course, including the box office results from Avatar: The Way of Water, along with the company receiving 23 Academy Award nominations. However, Pixar is now floundering, and the Marvel superhero franchise has been seeing real chinks in the armor. While I expect Guardians of the Galaxy Vol. 3, coming in May 2023, to be a hit, there are obvious questions about Ant-Man and the Wasp: Quantumania (February 17) and The Marvels (July 28).

 

Much is expected from CEO Bob Iger’s first earnings call since returning, and he will need to ace it. Stay tuned.

 

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Ray Keating is the editor, publisher and economist for DisneyBizJournal.com; and author of the Pastor Stephen Grant thrillers and mysteries, and the Alliance of Saint Michael novels; and assorted nonfiction books. Have Ray Keating speak your group, business, school, church, or organization. Email him at raykeating@keatingreports.com.

 

The views expressed here are his own – after all, no one else should be held responsible for this stuff, right? Keating also is a Disney shareholder.

 

Consider books by Ray Keating…

 

• The Weekly Economist: 52 Quick Reads to Help You Think Like an Economist. Signed paperbacks at RayKeatingOnline.com or paperbacks, hardcovers and Kindle editions at Amazon.com.

 

• Cathedral: An Alliance of Saint Michael Novel. Signed paperbacks and/or paperbacks, hardcovers and the Kindle edition at Amazon. 

 

• The Pastor Stephen Grant thrillers and mysteries. The latest in the series is Persecution: A Pastor Stephen Grant Novel. Get the signed books here, or paperbacks and Kindle editions right here.

 

• The Lutheran Planner: The TO DO List Solution combines a simple, powerful system for getting things done with encouragement, inspiration and consolation from the Christian faith.

 

• Behind Enemy Lines: Conservative Communiques from Left-Wing New York  –  signed books  or at  Amazon.

 

•  Free Trade Rocks! 10 Points on International Trade Everyone Should Know is available at  Amazon  in paperback or for the Kindle edition, and signed books at  www.raykeatingonline.com. 

 

Also, check out Ray’s podcasts – the Daily Dose of Disney, Free Enterprise in Three Minutes, and the PRESS CLUB C Podcast.

Market Expectations for Disney Earnings This Week

 by Ray Keating

News/Analysis

DisneyBizJournal.com

May 9, 2022

 

The Walt Disney Company will present second quarter earnings after the close of trading on Wednesday, May 11.

What is the market looking at and expecting?

 

CNBC noted that while investors are focused on streaming, that is, namely, Disney+, the advice was that theme park performance should not be ignored. It was reported:

 

Disney’s parks have rebounded significantly. The division, which also includes Disney experiences and consumer products, saw revenues top $7.2 billion during the fiscal first quarter, double the $3.6 billion generated in the prior-year quarter. The segment saw operating results jump to $2.5 billion compared to a loss of $100 million in the same period last year.

 

The company said in February that its domestic parks have yet to see a significant return from international travelers, which prepandemic accounted for 18% to 20% of guests. Additionally, not all of its international parks have been open full-time during the last quarter. While Paris Disneyland is celebrating its 30th anniversary, Shanghai Disneyland closed its gates temporarily due to local Covid spikes.

 

Technology and investments coming on line at the parks received attention in the piece.

 

Meanwhile, a Zacks Equity Research report at Yahoo Finance zeroed in on market expectations in terms of revenue and earnings. Key points:

 

The Zacks Consensus Estimate for earnings has moved down 1.6% to $1.20 per share over the past 30 days, indicating an increase of 51.9% year over year. The consensus mark for revenues is pegged at $20.25 billion, suggesting growth of 29.73% from the year-ago quarter’s reported figure. The company’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters, missing in one, the average surprise being 67.82%...

 

The consensus mark number of paid subscribers at Disney+ is currently pegged at 135.2 million, suggesting 4.2% growth sequentially and a 30.5% rise year over year.

 

In addition, a few points from a Seeking Alpha analysis warrant noting:

 

• “Although every quarter is important for a company, it would only be appropriate to say that there is more at stake this quarter than in most typical quarters. This is because there is a significant amount of pessimism surrounding the company and its prospects moving forward. Investors are worried about a slowdown in streaming and they are concerned about the impact of continued shutdowns at some of the company's parks across the world in response to continued COVID infection rates. Though these are legitimate concerns, the overall picture for the company would likely be appealing for the long haul.”

 

• “As of the end of its latest quarter, The Walt Disney Company had 129.8 million subscribers on Disney+. Though this is impressive, investors are banking on the company achieving the 230 million to 260 million global subscribers that the company was forecasting it would have by the end of 2024. In order to reach the low end of that range, the business would need to add an average of about 9.1 million subscribers each quarter between now and then. So far, that doesn't look to be too much of a problem. In the latest quarter alone, the number of subscribers the company had was up by 11.7 million compared to what the company had just one quarter earlier.”

 

• Even with Shanghai Disney remaining closed and the Hong Kong park only recently reopening, “there is the potential for the Parks & Experiences portion of The Walt Disney Company to perform well.”

 

• “…some investors may point to the political issues the company is having in Florida. But I see that as more of a sideshow that should have a limited impact, if any, on the company.”

 

Finally, Kiplinger offers this outlook: “And in addition to direct-to-consumer subscriber growth across Disney+, Hulu and ESPN+, which will help DIS stock outperform its peers, BofA Global Research analyst Jessica Reif Ehrlich says the company's theme parks are on the upswing. ‘Despite achieving near record results in its fiscal first quarter, international visitors still represent a minimal percentage of total attendance, hotel room occupancy remains well below peak levels as all hotels have not been reopened yet, cruise ship capacity remains below pre-pandemic peaks and parks are still operating below peak capacity levels,’ Reif writes in a note to clients. ‘These should all be additional tailwinds over the next 18-24 months.’”

 

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Ray Keating is the editor, publisher and economist for DisneyBizJournal.com, and author of the Pastor Stephen Grant novels and assorted nonfiction books. Have Ray Keating speak your group, business, school, church, or organization. Email him at raykeating@keatingreports.com.

 

The views expressed here are his own – after all, no one else should be held responsible for this stuff, right?

 

Two great ways to pre-order Cathedral: An Alliance of Saint Michael Novel, which is Ray’s sixteenth work of fiction, and the first in the Alliance of Saint Michael series. Signed paperbacks here and the Kindle edition here. 

 

Two great ways to order Ray Keating’s new nonfiction book – The Weekly Economist: 52 Quick Reads to Help You Think Like an Economist. Signed paperbacks here, and paperbacks, hardcovers and Kindle editions here.  

 

Get all of Ray Keating Pastor Stephen Grant thrillers and mysteries in paperback and for the Kindle at Amazon.com and signed books at www.RayKeatingOnline.com. 

 

Get more out of the rest of 2022 with The Disney Planner 2022: The TO DO List Solution! It combines a simple, powerful system for getting things done with encouragement and fun for Disney fans, including those who love Mickey, Marvel, Star Wars, Indiana Jones, Pixar, princesses and more. Also, “The Disney Planner 2022: The TO DO List Solution” comes with a handy spiral binding for easy use. It’s on sale and shipping is always free!

 

Also, check out Ray’s podcasts – the Daily Dose of Disney, Free Enterprise in Three Minutes, and the PRESS CLUB C Podcast.

 

Disney’s Earnings Call a Big Hit, with Disney+ Subscribers Beating Expectations

 by Ray Keating

News

DisneyBizJournal.com

February 9, 2022

 

Let’s see if I have this straight. When Disney+ subscriber gains fail to meet market expectations, Disney’s stock takes a hit. It follows that when Disney+ subscriptions beat market expectations, Disney’s stock rises. Got it.

The market liked what it heard on The Walt Disney Company’s earnings call on February 9. Indeed, the company hit the sweet spot on several key measures – and yes, very much including Disney+ subscriber gains.

 

For the first quarter ended January 1, 2022, diluted earnings per share, excluding certain items, came in at $1.06, up from $0.32 in the prior-year quarter.

 

Also, domestic parks and resorts earned record revenues and operating income. The Disney Parks, Experiences and Products division saw revenues up by 102 percent versus the same quarter last year.

 

And as for those streaming subscriptions, Disney+ added 11.8 subscribers in the first quarter – outdistancing market expectations. Indeed, it was a healthy gain compared to the previous quarter’s gain of 2 million. Compared to the previous-year quarter, Disney+ subscribers were up by 37 percent, from 94.9 million to 129.8 million. 

 

ESPN+ subscribers experienced an increase of 76 percent, from 12.1 million to 21.3 million. And Hulu rose from 39.4 million subscribers to 45.3 million, a gain of 15 percent.

 

That tallies up to total subscriptions across Disney’s streaming portfolio registering 196.4 million, compared to 146.4 million.

 

In after-hours trading (about an hour-and-a-half after the market closed), Disney’s share price was up by 8 percent.

 

Looking ahead for the company, Bob Chapek, Disney CEO, declared, “This marks the final year of The Walt Disney Company’s first century, and performance like this coupled with our unmatched collection of assets and platforms, creative capabilities, and unique place in the culture give me great confidence we will continue to define entertainment for the next 100 years.” 

 

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Ray Keating is the editor, publisher and economist for DisneyBizJournal.com, and author of the Pastor Stephen Grant novels and assorted nonfiction books. Have Ray Keating speak your group, business, school, church, or organization. Email him at raykeating@keatingreports.com.

 

The views expressed here are his own – after all, no one else should be held responsible for this stuff, right?

 

Get more out of 2022 with The Disney Planner 2022: The TO DO List Solution! It combines a simple, powerful system for getting things done with encouragement and fun for Disney fans, including those who love Mickey, Marvel, Star Wars, Indiana Jones, Pixar, princesses and more. Also, “The Disney Planner 2022: The TO DO List Solution” comes with a handy spiral binding for easy use. 

 

Keating has three new books out. Vatican Shadows: A Pastor Stephen Grant Novel is the 13^th thriller/mystery in the Pastor Stephen Grant series. Get the paperback or Kindle edition at Amazon, or signed books at www.raykeatingonline.com. Past Lives: A Pastor Stephen Grant Short Story is the 14th book in the series. Again, get the paperback or Kindle edition at Amazon, or signed book at www.raykeatingonline.com. And order the 15th book in the series What’s Lost? A Pastor Stephen Grant Short Story – grab it at Amazon.com or signed editions at www.raykeatingonline.com. 

 

Also, check out Ray’s podcasts – the Daily Dose of Disney, Free Enterprise in Three Minutes, and the PRESS CLUB C Podcast.