Will Theme Park Attendance Aid Disney's (DIS) Q1 Earnings?
Disney’s DIS first-quarter fiscal 2020 results, scheduled to be released on Feb 4, are expected to have benefited from strong box-office collections of Frozen 2 and Star Wars: Rise of Skywalker.
Further, a solid attendance level at its theme parks is expected to have benefited the top line. Moreover, the addition of Hulu and Fox assets are expected to have aided top-line growth.
However, ongoing investments in ESPN+ and Disney+ are expected to have negatively impacted the bottom line.
Disney projects the 21CF acquisition and the impact of taking full operational control of Hulu to hurt fiscal first-quarter earnings before purchase accounting by 30 cents.
Click here to know how Disney’s overall performance is likely to be.
The Walt Disney Company Revenue (TTM)
The Walt Disney Company revenue-ttm | The Walt Disney Company Quote
Attendance Levels at Domestic Theme Parks Likely to Jump
The attendance level at Disney’s domestic theme parks is expected to have improved in the to-be-reported quarter, primarily owing to the opening of Star Wars: Galaxy’s Edge and the December opening of Rise of the Resistance at Walt Disney World.
Moreover, higher sales of toys and other merchandise based on characters from all of Disney’s popular franchises, like Marvel, Star Wars, Frozen and Toy Story, during the holiday season are expected to have benefited the Consumer Products sub-segment.
The Zacks Consensus Estimate for the Parks, Experiences and Consumer Products revenues is pegged at $7.40 billion, indicating growth of 11.1% from the figure reported in the previous quarter.
However, lower attendance at Hong Kong Disneyland, primarily due to political unrest, is expected to have hurt the segment’s top line. In fact, for first-quarter fiscal 2020, Disney expects operating income at Hong Kong Disneyland to decline almost $80 million.
Moreover, domestic revenue growth at Theme Parks is expected to have been partially offset by meaningful cost increases, primarily attributable to higher operating expenses associated with Galaxy's Edge and labor expenses due to higher wages.
The Zacks Consensus Estimate for the segment’s operating income is pegged at $1.61 billion, indicating growth of 16.7% from the figure reported in the previous quarter.
Fox Assets & Hulu to Drive Growth
Media Networks’ top-line performance in the first quarter is expected to reflect the contribution from 21st Century Fox (21CF) assets that the company acquired in 2019.
The company’s decision to add licensed content to Hulu might have positively impacted the top line, owing to the service’s ability to attract users.
This is also expected to boost Hulu’s competitive position in the streaming space, which is currently dominated by the likes of Netflix NFLX, Amazon’s AMZN prime video and AT&T’s T HBO.
The Zacks Consensus Estimate for Media Networks’ first-quarter revenues is pegged at $6.77 billion, indicating growth of 14.3% from the year-ago quarter’s reported figure.
Zacks Rank
Disney currently has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Free: Zacks’ Single Best Stock Set to Double
Today you are invited to download our latest Special Report that reveals 5 stocks with the most potential to gain +100% or more in 2020. From those 5, Zacks Director of Research, Sheraz Mian hand-picks one to have the most explosive upside of all.
This pioneering tech ticker had soared to all-time highs and then subsided to a price that is irresistible. Now a pending acquisition could super-charge the company’s drive past competitors in the development of true Artificial Intelligence. The earlier you get in to this stock, the greater your potential gain.
See 5 Stocks Set to Double>>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
The Walt Disney Company (DIS) : Free Stock Analysis Report
Amazon.com, Inc. (AMZN) : Free Stock Analysis Report
Netflix, Inc. (NFLX) : Free Stock Analysis Report
AT&T Inc. (T) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
