Disney Q4 Results Likely to Get Lift From Theme Parks

Key Takeaways

  • Walt Disney is anticipated to submit This fall FY 2022 adjusted earnings per share of $0.57, a year-over-year acquire of 54%, aided by sturdy theme parks income, when it reviews on Nov. 8.
  • The corporate faces questions on the way forward for its TV properties after one outstanding investor lately demanded spin off the ESPN cable sports activities community.
  • The Disney+ streaming platform may even be in focus because it hikes costs and provides an ad-supported tier.
  • CEO Bob Chapek must take care of calls for for pay raises from a union representing Disney’s theme park employees in Florida.

The Walt Disney Firm (DIS) heads into its fourth-quarter earnings report late on Nov. 8 with appreciable enterprise momentum and loads of unanswered questions.

The operator of theme parks and resorts, tv networks together with ESPN and ABC, movie studios, and the Disney+ digital streaming service is anticipated to submit adjusted earnings per share (EPS) of $0.57, up from $0.37 a yr earlier, primarily based on the typical estimate of analysts tracked by Seen Alpha. Income is anticipated to have gained 14%, bolstered by booming journey demand and the return of movie show audiences.

The Disney Parks, Experiences and Merchandise working phase, which accounted for a 3rd of Disney’s income and greater than half its working earnings over the primary 9 months of 2022, is anticipated to ship report income.

In the meantime, Disney’s media and leisure division is dealing with the results of the extreme competitors for viewers and digital subscriptions from different media conglomerates. Wire-cutting by cable subscribers has crimped progress at Disney’s flagship sports activities programmer ESPN, which additionally faces escalating programming rights charges. Days after Disney posted third-quarter ends in August, Disney investor and hedge fund supervisor Daniel Loeb launched a public letter to Disney CEO Bob Chapek calling on the corporate to chop excessive prices and to spin off ESPN into an unbiased firm.

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The Disney+ digital streaming service additionally faces competitors from the likes of Netflix, Inc. (NFLX) in addition to Paramount World (PARA) and Warner Bros. Discovery, Inc. (WBD). Analysts are more likely to hunt down additional particulars in regards to the aggressive positioning of Disney+ because the streaming service raises costs and provides an advertising-supported service tier subsequent month, following within the steps of Netflix.

Chapek’s management is more likely to stay a difficulty as effectively, within the third yr of the CEO’s incessantly rocky tenure. Whereas Disney’s board voted unanimously to increase Chapek’s contract for 3 years in June, he stays a lightning rod for controversy amid govt turnover.

Chapek is going through warmth as buyers demand that he reduce prices, whereas a union representing its theme park employees in Florida campaigns for a 20% increase and a minimal wage of $18 per hour. Some longtime theme parks patrons are already complaining that Disney’s excessive hospitality and upkeep requirements have deteriorated because of employees cuts in the course of the pandemic.

Disney’s inventory is down 36% in 2022, in contrast with a 22% decline for the S&P 500 Index. Over the previous yr, Disney’s share value is down 42%, versus a 20% loss for the S&P 500 Index.

Supply: TradingView.

Supply: TradingView

Walt Disney Earnings Historical past

Walt Disney posted Q3 FY 2022 outcomes above market expectations in August, with adjusted EPS, income, and Disney+ subscriber numbers all topping analysts’ consensus estimates. The inventory gained 4.7% the subsequent day and gave all of it again inside three weeks.

The corporate missed expectations for the second quarter in Could for earnings and income, whereas income at its Parks, Experiences and Merchandise phase and Disney+ subscriptions beat estimates. The inventory slipped 0.9% the next day.

Walt Disney Key Stats

  Estimate for This fall FY 2022 This fall FY 2021 This fall FY 2020
Adjusted Earnings
Per Share ($)
0.57 0.37 -0.20
Income ($B) 21.2 18.5 14.7
Parks, Expertise and
Merchandise Income ($B)
7.4 5.5 2.7

Supply: Seen Alpha

The Key Metric

Walt Disney is split into two reporting segments: Media and Leisure Distribution and Parks, Experiences and Merchandise.

Parks, Experiences and Merchandise contains 12 theme parks and 53 resorts at six resort locations, the Disney Cruise Line, Disney Trip Membership timeshare gross sales, two guided excursions corporations, the Imagineering division that develops Disney’s theme parks, merchandise licensing, and retail gross sales.

The COVID-19 pandemic took a toll on Disney theme park revenues. Parks, Experiences, and Merchandise income plummeted from $6.9 billion in This fall FY 2019 to $1.1 billion 9 months later. The phase is anticipated to submit report income of $7.4 billion for This fall FY 2022, marking a virtually full restoration for Disney’s theme parks and resorts, aided by value hikes on admissions and concessions.

All the corporate’s parks and resorts had been open throughout This fall, though Shanghai Disneyland, which reopened on June 30 after a three-month shutdown, closed once more on Oct. 31 after native authorities blocked guests from leaving for hours for COVID-19 screening following a optimistic take a look at for a resort visitor.