waltdisneypresent today quarterly results with the hard blow that Netflix suffered with respect to subscribers. From the firm expect a increase in Disney+ subscribers for the 4th quarter of the year and they are hopeful with the theme parks after the pandemic, according to Robbie Whelan in The Wall Street Journal.
As Disney prepares to report fiscal second-quarter earnings, shares of the world’s largest entertainment company are nearing their lowest price in nearly two years, and Disney has become one of the worst performing stocks in the Dow Jones industrial average in the last 12 months. The company’s shares have down 30% since the beginning of this year.
The reasons for Disney’s nosedive are threefold, analysts say: fears of an impending recession, general stock market volatility, and Netflix.
During the first year and a half of the coronavirus pandemic, the streaming video business model was the toast of Wall Street. Then last month Netflix reported its first net subscriber loss in a decade, with some 200,000 customers disconnected. Those results made Netflix shares fell nearly 50%, wiping out nearly $80 billion in market value into the world’s largest streamer and putting pressure on the shares of Netflix’s streaming competitors.
Disney, what launched its flagship streaming platform, Disney+, just a few months before the pandemicand has now combined it with more adult entertainment on Hulu and live sports programming on ESPN+, has also reaped the rewards of streaming on the couch. . The change helped offset covid-19 related closures at its theme parks, which had been the company’s best-performing division. In the most recent quarter, attendance at Disney parks rebounded.
Wall Street analysts expect Disney to add around 5.2 million net new subscribers to Disney+according to consensus estimates compiled by FactSet.
Analysts predict that general revenuewill decrease in the last quarter to 20.1 billion dollars from 21.8 billion dollarsand the Parks and Experiences division revenue will fall to $5.2 billion from $5.7 billion. Despite the decline, that estimate would be more than double the $2 billion in revenue generated by the division during the same period last year.
But the company’s emphasis on its streaming business could become a pressure point as consumers change their behavior amid a high inflation and more options on where to spend your entertainment budgetsanalysts say.
“The reason you own Disney, first and foremost, is the park business,” he said. Markus Hansen, Portfolio Manager at Vontobel Asset Management, which owns Disney shares. “The markets’ obsession with streaming is a product of Covid. The parks, the bread and butter of the business, were closed.”
“No one knew how long the park closures would last and many investors were relying on broadcasting to generate the company’s revenue growth,” Hansen said. Wednesday’s earnings and stock market response will be key to understanding whether that mindset has changed.
“I want the company to differentiate itself,” Hansen said. “The problems in other streamers are very specific to those companies. I want to hear Disney say, “By the way, we’re a theme park business, it’s our bread and butter, and the company has this incredible ability to take a piece of intellectual property and monetize it in different ways.”
back to theaters
A sign of hope for Disney is the movie box office comeback. On your first weekend, “Dr. Strange in the Multiverse of Madness”, the first blockbuster to come out this year from Disney’s Marvel Studios brand, grossed $185 million in North Americawhich makes it the second highest grossing film of the pandemic and marks a solid return to theaters by superhero movie fans
The Marvel movies have been a reliable revenue generator for Disney for over a decadeand once they start streaming on Disney+, they’re seen as a key to retaining subscribers.
“We are in a strange moment,” he said. Jessica Reif Ehrlich, media analyst who follows Disney for Bank of America Merrill Lynch. “Normally, if we were on the verge of a recession, most of us would stay away from stocks. But this is not a normal recession. People have been locked up. The demand for travel, for entertainment, for getting out of the house, it’s just incredible right now.”
Debts and Bills in Florida
Analysts and investors can hear more Wednesday from Disney leaders, including the CEO Bob Chapekon recent repeal by the Florida legislature of a special taxing district that houses the Walt Disney World theme park. The district owes $1 billion in municipal debtwhich is now mired in a legal mess over how bondholders will be paid under the new deal.
The bill that repeals the tax treatment was produced in the midst of the controversy over the Disney’s response to the Florida Parents’ Rights in Education Billenacted last month, which addresses how teaches gender and sexuality in schools. Chapek initially opted for say nothing about what opponents call the bill “Don’t Say Gay” but after pressure from some employees and critics, he changed course and vowed to fight legislation and similar measures in other states, and promised to stop all political donations in Florida.
waltdisney It is trading at $109 at the opening of Wall Street and the location of the moving averages, the 70-period below the 200-period, would give us a bearish signal. Meanwhile, Ei indicators are mostly bearish.