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Walt Disney (DIS) to Report Q4 Earnings: What's in the Cards?

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The Walt Disney DIS is set to report fourth-quarter fiscal 2020 results on Nov 12.

The Zacks Consensus Estimate for loss has widened by a couple of cents to 62 cents per share over the past 30 days. Disney had reported earnings of $1.07 per share in the year-ago quarter.

The consensus mark for revenues is pegged at $14.34 billion, suggesting a decline of 25% 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 27.6%.

The Walt Disney Company Price, Consensus and EPS Surprise

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

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


Let’s see how things are shaping up for this announcement.


Coronavirus Dents Disney’s Q4 Growth

Disney’s top line for fiscal fourth quarter is expected to have been negatively impacted by the outbreak of the coronavirus pandemic.

The Zacks Rank #4 (Sell) company is expected to have suffered losses from the closure of its theme parks and cruise ships, and postponement of movie releases.

Disney kept the California and Florida parks closed in the to-be-reported quarter, while the Shanghai and Hong Kong parks operated on reduced capacity due to strict social-distancing norms. 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 $2.26 billion, significantly down from $6.67 billion reported in the year-ago quarter.

Disney+’s Solid Content Portfolio Aid User Growth

Solid content portfolio of Disney+ is expected to have helped the company gain users during lockdowns amid the pandemic-related physical distancing in the to-be-reported quarter.

Notably, as of Aug 3, Disney+’s subscriber base had surpassed 60.5 million, triggered by higher media consumption during lockdowns and on the following of pandemic-related physical-distancing norms despite stiff competition from Netflix NFLX and entrance of Comcast’s CMCSA Peacock and AT&T’s T HBO Max.

Markedly, Disney+’s closest competitor Netflix added 2.2 million paid subscribers globally in its recently reported third-quarter 2020 results. Moreover, since in nationwide release on Jul 15, Comcast’s Peacock witnessed 22 million sign-ups. HBO Max also surpassed AT&T’s estimate and had 38 million subscribers at the end of third-quarter 2020.

The streaming service has been benefiting from Disney’s bundle offering that comprises of ESPN and Hulu. Moreover, solid content portfolio has been a game changer.

Markedly, according to Sensor Tower, downloads of the Disney+ app spiked 68% from Sep 4 through Sep 6 from the prior-weekend levels, with the launch of Mulan. Moreover, consumer spending on Disney+ also spiked 193% over the same period.

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.

The Zacks Consensus Estimate for DTC & International/Consumer Products revenues is currently pegged at $4.47 billion, indicating 30.5% growth from the figure reported in the year-ago quarter.

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