Credit: DisneyThe Walt Disney Company is expected to report its earnings results for the second quarter of 2023 on Wednesday. With several topics to look out for, we will highlight some of the most pertinent items investors and Disney fans will focus on when we hear from Disney CEO Bob Iger next week.
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Disney is expected to publish its Q2 2023 results on May 10, reporting on the first full quarter since Bob Iger’s return to the helm as CEO. The company is likely to see modest revenue growth of about 7% year-over-year, driven by the recovery of its Theme Park business and the continued expansion of its streaming services. However, earnings per share could decline slightly compared to last year due to higher costs and investments in content and technology.
The Theme Park segment, which accounts for about 40% of Disney’s revenue, will likely benefit from easing pandemic-related restrictions and the pent-up demand for travel and entertainment. Disney has been reopening its parks gradually, with some locations operating at reduced capacity and with enhanced safety measures. The company has also been raising prices and introducing new attractions and experiences to boost spending per Guest.
The streaming segment, which includes Disney+, ESPN+, and Hulu, is expected to see strong subscriber growth as the company leverages its rich portfolio of intellectual property and franchises to attract and retain customers. Disney+ has regularly added new content, such as Marvel’s Black Panther: Wakanda Forever (2022) and Star Wars: The Mandalorian Season 3. The service has also been expanding globally, with launches in Latin America, India, and other markets. However, the streaming segment could face some headwinds in Q2, such as losing rights to the IPL cricket tournament in India, which could impact Disney+ Hotstar’s subscriber base, and the price hike for Disney+ in the U.S., which could increase churn rates.
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Disney is also looking to improve the profitability of its streaming business, which has been operating at a loss due to high content and marketing costs. The company has guided that Disney+ will turn profitable by the end of 2024, while Hulu is already profitable on an operating basis. The company has also introduced a new ad-supported tier for Hulu, which could boost its advertising revenue.
Disney’s Q2 2023 results will likely reflect its resilience and adaptability in the face of unprecedented challenges and opportunities. The company is well-positioned to capitalize on the recovery of its core businesses and the growth of its digital platforms while investing in its future.
On its last earnings call, Disney said it would look to save $5.5 billion in costs, and $2.5 billion of that coming in non-content prices, including layoffs of 7,000 workers. The cost savings plan is an essential detail investors on Wall Street keenly focus on.
What will you want to hear during Disney’s earnings report next week?