Disney (DIS) will report its fiscal third quarter earnings before the bell on Wednesday as the company attempts to reach sustained profitability in its streaming division and also stabilize demand within its parks business.
As a reminder, Disney recently adjusted its reporting structure after CEO Bob Iger reorganized the company into three core business segments: Disney Entertainment, which includes its entire media and streaming portfolio; Experiences, which encompasses the parks business; and Sports, which includes ESPN networks and ESPN+.
Over the past year, Disney has been grappling with challenges that include a declining linear TV business, slower growth in its parks business, and profitability hurdles in streaming.
Disney CEO Bob Iger has attempted to reset the company with an aggressive turnaround plan and recently emerged victorious from a high-profile proxy fight against activist investor Nelson Peltz. But investors have been cautious as of late with shares reversing prior gains to fall more than 20% over the last three months.
Here’s how Wall Street expects Disney to perform, according to consensus estimates compiled by Bloomberg:
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Total revenue: $23.08 billion versus $22.33 in Q3 2023
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Adj. earnings per share: $1.19 versus $1.03 in Q3 2023
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Entertainment revenue: $10.37 billion
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Sports revenue: $4.40 billion
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Experiences revenue: $8.61 billion
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Disney+ subscriber: 154.55 million versus 146.10 million in Q3 2023
Guidance will be closely watched after last quarter’s disappointing forecast led to concerns over the company’s longterm outlook.
In May, Disney said an important part of its streaming business turned a profit for the first time but that it expects weaker results in that segment for the third quarter, highlighting the challenges in achieving sustained streaming profitability, a key priority as its linear TV business declines.
On Tuesday, the company announced price hikes will once again hit its various streaming services as it races towards profitability. The monthly cost of the Disney+ ad tier will rise by $2 to $9.99, while the ad-free version will also tick higher by $2 to hit $15.99.
Similarly, Hulu’s ad-supported tier will rise by $2 to $9.99 per month with the ad-free version rising by $1 to $18.99. The Disney Bundle will offer both ad tiers of Disney+ and Hulu for $10.99 per month, up $1 from its previous price and an overall more attractive offering compared to the individual plans.
ESPN+ and Hulu with Live TV will tick up by $1 and $6, respectively, to a monthly cost of $11.99 for ESPN+ and $82.99 for the ad-supported version of Hulu with Live TV. The ad-free version will now cost $95.99 a month.
The price changes are set to go into effect on Oct. 17. Disney expects full streaming profitability by the fourth quarter of this year.
