Media and entertainment conglomerate Walt Disney (DIS) is set to post quarterly results on Monday, before markets open.
Wall Street expects the Burbank, California-headquartered company to post EPS of $1.58, implying a decline of nearly 11%. Revenue is expected to be $25.60 billion, showing a rise of 3.6% during the quarter.
The company is benefiting from strong growth in streaming and park business. The theatrical releases of James Cameron’s sci-fi franchise Avatar: Fire and Ash and Zootopia 2 aided Disney’s dominance in the box office.
Seeking Alpha analyst Kenio Fontes said studios are “regaining momentum, driving both box office and DTC streaming growth, with key releases expected to sustain engagement and profitability.” He further added that even though Experiences segment faces macroeconomic risks, including new competition in Orlando, it is still maintaining strong margins and high operating income.
J.P. Morgan modeled Disney+ subs net adds of +2.1M in the first quarter.
However, Disney’s ongoing weakness in its traditional TV and film businesses in November worried investors. Operating income in the entertainment segment was down 35% year-over-year during the quarter.
The stock delivered little upside and has gained just over 2% last year, underperforming the over 16% rise in the broader S&P 500 Index.
Last year, Disney said it would name a replacement for CEO Bob Iger this year. Investors would pay attention to any remarks regarding this change during the company’s earnings call.
“We wouldn’t expect the company to address leadership succession during the earnings call, but do anticipate resolution of this matter over the very near term. While the change is not likely to result in major strategic shifts, we do believe the uncertainty around the process has been an overhang to shares, and see a catalyst in the announcement and any visibility into a smooth transition process,” said J.P. Morgan analyst David Karnovsky.
Over the last two years, Disney has beaten EPS estimates 100% of the time and has beaten revenue estimates 50% of the time.
Seeking Alpha analysts, Wall Street, and Seeking Alpha’s Quant ratings are all bullish and rated the stock a Buy.
Over the last three months, EPS estimates have seen one upward revision, compared to 11 downward revisions, while revenue estimates have seen one upward revision versus nine downward moves.