Disney (NYSE: DIS) Reports Before The Bell – What To Expect?

As The Walt Disney Company (NYSE: DIS) gears up to release its fiscal third-quarter earnings, investors and analysts are watching closely for signs of sustainable profitability in its streaming division and for indications of how demand has stabilised at its parks.

The company, under the leadership of CEO Bob Iger, has recently undergone a reorganization into three primary segments: Disney Entertainment, Experiences, and Sports, aiming to streamline operations and boost growth.

In the past year, Disney has encountered significant headwinds, with its linear TV business on the decline, slowing growth in parks, and diminishing streaming profitability. Despite these challenges, the company has steadfastly pursued a path toward profitability, especially for its streaming services, which are projected to achieve full profitability by the fourth quarter of this year.

With the past 4 quarters each delivering beats on EPS, but misses on revenue, we take a look at what markets are expecting this time around.

Wall Street expectations are sharp-eyed and specific: analysts forecast Disney’s total turnover to be around $23.09 billion, adjusted earnings per share to hit $1.19, and importantly, Disney+ subscribers to reach 154.55 million in the third quarter. These figures are crucial as they will provide valuable insights into the company’s performance and strategic direction moving forward.

In response to the need for increased profitability, Disney announced a price hike across its streaming services. Starting October 17, the Disney+ ad tier will increase to $9.99 per month, a move that signals the company’s commitment to balancing subscriber growth with revenue generation.

Another strategic play is Disney’s venture into new streaming platforms. Notably, it will partner with Fox and Warner Bros. Discovery to launch a new sports streaming platform with a subscription cost of $42.99 per month, and separately, an ESPN streaming platform is set to debut in 2025. These initiatives reflect Disney’s ambition to capitalize on the lucrative sports streaming market and diversify its revenue streams.

Disney’s parks segment, a substantial contributor to the company’s overall profit, anticipates operating profit for the third quarter to be on par with the previous year. The moderation in global peak travel post-COVID has been cited as evidence backing this expectation, pointing to a stabilising demand in the market.

Meanwhile, Disney’s box office performance remains robust, with high hopes pinned on upcoming blockbuster releases, including sequels to crowd favorites “Moana” and “The Lion King,” with “Mufasa: The Lion King.”

As the earnings report release looms, all eyes will be on Disney’s parks and streaming services. These core divisions are not only pivotal to its near-term financial health but also reflective of the company's ability to adapt and innovate in a rapidly evolving entertainment landscape. The outcomes revealed in the upcoming report will play a significant role in shaping investor sentiments and determining the strategic priorities for one of the world’s most beloved entertainment giants.