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Walt Disney (DIS) to Report Q2 Earnings: What's in the Cards?

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The Walt Disney DIS is set to report second-quarter fiscal 2021 results on May 13.

The Zacks Consensus Estimate for earnings has moved down 3.4% to 28 cents per share over the past 30 days, indicating decline of 51.3% year over year.

The consensus mark for revenues is pegged at $16.1 billion, suggesting a decline of 10.6% 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 83.1%.

Let’s see how things have shaped up for this announcement.

The Walt Disney Company Price and EPS Surprise

The Walt Disney Company Price and EPS Surprise
The Walt Disney Company Price and EPS Surprise

The Walt Disney Company price-eps-surprise | The Walt Disney Company Quote

Coronavirus Woes May Impact Q2 Results

Disney’s top line for the fiscal second quarter is expected to have been negatively impacted by the outbreak of the coronavirus pandemic. Cruise line business remains closed and its re-opened resorts are operating at a lower capacity, which may have negatively impacted the top line.

Moreover, postponement of movie releases is expected to have hit top-line growth for this Zacks Rank #3 (Hold) company in the fiscal second quarter.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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 $3.01 billion, indicating a decline of 45.7% from the year-ago quarter.

Disney+’s Solid Content Portfolio Aids User Growth

The company is expected to have benefited from steady growth in global paid subscriptions across its portfolio of direct-to-consumer services including ESPN+ and Hulu, which reported 12.1 million and 39.4 million paid subscribers at the end of the fiscal first quarter.

Disney+, as of Jan 2, 2021, had 94.9 million paid subscribers, reflecting strong growth since its launch in November 2019. The company added more than 21.2 million users sequentially.

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 3.98 million paid subscribers globally in its recently reported first-quarter 2021 results. Netflix now has 207.64 million paid subscribers worldwide, up 21.9% year over year.

Additionally, AT&T’s T HBO Max streaming service launched in May helped expand the overall pool of HBO and HBO Max customers by 44.2 million in the United States, and 63.9 million globally as of the first quarter of 2021. Moreover, since its nationwide release on Jul 15, Comcast’s CMCSA Peacock witnessed 42 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.

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.

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AT&T Inc. (T) : Free Stock Analysis Report

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The Walt Disney Company (DIS) : Free Stock Analysis Report

Netflix, Inc. (NFLX) : Free Stock Analysis Report

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