Main menu


Disney warned of a turbulent economy, but its diversified operations offer security as it approaches its 2024 streaming subscriber target

featured image

Netflix Inc. rebounded. Walt Disney’s streaming service continues to grow despite warnings from Chief Financial Officer Christine McCarthy in May that costs will rise amid macroeconomic hurdles can you do

Disney DIS,
Like nearly all tech giants, it has weathered a volatile economic climate that has seen other companies cut operating costs and lower revenue projections. Hardest hit was video streaming rival Netflix NFLX.
This has resulted in at least two layoffs affecting about 450 people. Last week, Warner Bros. Discovery WBD,
reported a second quarter loss of $3.42 billion, or $1.50 per share.

“While we expect Disney+ to post higher net additions in the second half than in the first half, it’s worth mentioning that the first half was better than expected,” McCarthy said in the company’s final results. I will report back in May. “Furthermore, we note that some of the Eastern European markets that we will launch towards the end of the third quarter, including Poland, are in regions affected by geopolitical factors.”

READ MORE: Disney Stock Turns Lost After Warning of Streaming Doom

Disney, which is expected to report third-quarter earnings on Wednesday, added 7.9 million Disney+ subscriptions in the second fiscal quarter, bringing the total to 137.7 million subscribers, and ESPN+ and Hulu. Targeting 230-260 million total streaming subscribers by FY2024.

Americas Media analyst Brett Feldman said on July 26 that in lowering his estimate for fiscal 2024 from 242 million to 223 million, he noted “increasing competition, macro headwinds and a Loss of streaming rights to IPL may cause Disney to lower this target.” He maintained his estimate of a net increase of 11 million in the third quarter.

Well documented Netflix and Roku Inc. ROKU,
As with Comcast Corp.’s ongoing challenge to CMCSA,
Peacock Sends Signal to Industry Rahul Telang, a professor of information systems at Carnegie Mellon University, argues for a “major trend” with integration in the near future.

“We are seeing huge changes in pricing, types and amounts of content, and streaming platforms themselves. Services will become like TV channels,” Telang told MarketWatch. “And those struggling like Peacock and possibly HBO Max may get bought out or just leave.”

what to expect

Earnings: On average, analysts surveyed by FactSet expect Disney to earn 98 cents per share in the third quarter, up from 80 cents a share a year ago.

Contributors to Estimize, a crowdsourcing platform that collects quotes from Wall Street analysts, buy-side analysts, fund managers, executives, academics, and more, forecast earnings of 98 cents per share on average. .

Earnings: On average, analysts expect Disney to report third-quarter revenue of $21 billion, up from $17.02 billion a year earlier. Estimated contributors, on average, he predicts $21 billion.

Stock movement: Disney’s stock has fallen 32% so far this year, while the S&P 500 SPX has
decreased by 13%. Disney shares are down 5% since the company last reported quarterly earnings.

analyst comment

Americas Media analyst Brett Feldman put a question on the minds of analysts in a July 26th note. Will Disney reach his 2024 target of 230 million to 260 million streaming subscribers?He thinks Disney will land somewhere on the lower end of that range. increase.

But with Disney+’s international and global rollout on the horizon and a surge in reopened parks, cruises and live sporting events on ESPN, the Magic Kingdom is far stronger than its main rival. I am in a position.

“Netflix is ​​on top of a mountain, [video-streaming] Jon Christian, executive vice president of digital media supply chain at Qvest.US, the largest media and technology consultancy, told MarketWatch on Monday.