The Walt Disney
DIS
is set to report first-quarter fiscal 2021 results on Feb 11.
The Zacks Consensus Estimate for loss has remained steady at 47 cents per share over the past 30 days. Disney had reported earnings of $1.53 per share in the year-ago quarter.
The consensus mark for revenues is pegged at $15.6 billion, suggesting a decline of 25% from the year-ago quarter’s reported figure.
Notably, the company’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters but missed the same in one, the average surprise being 42.1%.
Let’s see how things have shaped up for this announcement.
The Walt Disney Company Price and EPS Surprise
The Walt Disney Company price-eps-surprise
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The Walt Disney Company Quote
Coronavirus Woes to Impact Q1 Results
Disney’s top line for fiscal first quarter is expected to have been negatively impacted by the outbreak of the coronavirus pandemic.
This Zacks Rank #4 (Sell) company is expected to have suffered losses from the closure of its theme parks and cruise ships, and postponement of movie releases.
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the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here
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While all four Disney’s adventure parks in California, Florida, Shanghai and Hong Kong operated on reduced capacity due to strict social-distancing norms, water parks such as Blizzard Beach and Typhoon Lagoon Water Parks remain closed. This is expected to have hurt occupancy, thereby negatively impacting top-line growth.
The Zacks Consensus Estimate for Parks, Experiences & Consumer Products revenues is currently pegged at $2.93 billion, significantly down from $7.39 billion reported in the year-ago quarter.
Disney+’s Solid Content Portfolio Aid User Growth
Markedly, the company’s portfolio of direct-to-consumer services has exceeded a total of 137 million global paid subscriptions including 11.5 million ESPN+ subscribers, 38.8 million Hulu subscribers, and a staggering 86.8 million Disney+ subscribers since its launch in November 2019.
Solid content portfolio of Disney+ is expected to have helped the company gain users amid the pandemic-related physical distancing in the to-be-reported quarter.
Markedly, Disney+’s closest competitor
Netflix
NFLX
added 8.51 million paid subscribers globally in its recently reported fourth-quarter 2020 results. Netflix now has 203.7 million paid subscribers worldwide, up 21.9% year over year.
Additionally,
AT&T
’s
T
HBO Max streaming service launched in May helped grow the overall pool of HBO and HBO Max customers by 38 million in the United States, and 57 million globally as of the third quarter of 2020. Moreover, since its nationwide release on Jul 15,
Comcast
’s
CMCSA
Peacock witnessed 26 million sign-ups.
Disney’s deal with Comcast to bring Disney+ and ESPN+ to the cable provider’s Xfinity set top boxes and platforms and reach more than 20 million Comcast cable and Internet customers is expected to have been a game changer.
Markedly, Disney+ streaming service had about 2.3 million global installations of its mobile app over the Christmas holiday, a 28% increase from the prior weekend, according to the market-research firm Sensor Tower, cited by
Bloomberg
.
Christmas Day saw the release of
Soul
, the latest animated feature from Pixar.
Soul
had a theatrical launch in several international markets, including China, which generated $7.6 million at the box office.
Additionally, apart from a compelling content portfolio, introduction of features like GroupWatch that connects friends and families to watch movies and shows from the entire Disney+ library, even when apart, has been a key catalyst.
The Zacks Consensus Estimate for DTC & International/Consumer Products revenues is currently pegged at $5.27 billion, indicating 32.4% growth from the figure reported in the year-ago quarter.
Key Developments in Q1
During the to-be-reported quarter, Disney’s board of directors announced that it will not declare a semi-annual cash dividend for the second half of fiscal 2020, in light of the ongoing impact of COVID-19 and the company’s decision to prioritize investment in its direct-to-consumer initiatives.
Moreover, Disney announced that the company will be centralizing its media businesses into a single organization that will be responsible for content distribution, ad sales and Disney+ to further accelerate its direct-to-consumer strategy.
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