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Media, Entertainment Growth to Aid Disney's (DIS) Q3 Earnings

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The Walt Disney’s (DIS - Free Report) third-quarter fiscal 2021 results, set to be reported on Aug 12, are expected to reflect setbacks from limited operating capacity in theme parks, closure of cruise ship and resumption of limited movie studio operations due to the coronavirus outbreak.

Beginning first-quarter 2021, this Zacks Rank #3 (Hold) company started reporting results of the media and entertainment businesses under the Media and Entertainment Distribution segment. The segment comprises Direct-to-Consumer (“DTC”), Linear Networks and Content Sales/Licensing businesses. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

While DTC revenues are expected to have benefited from robust adoption of Disney+, Content Sales/Licensing segment revenues are likely to have benefited from slow recovery in theatrical exhibition as consumers began returning to theaters. Cruella was released in theaters and via Disney+ Premier Access on May 28.

The Zacks Consensus Estimate for the number of paid subscribers for Disney+, ESPN+ and Hulu is pegged at 109.9 million, 14.9 million and 43.2 million, respectively.

Moreover, improvement in ad demand and spending is expected to have benefited Disney-division ESPN’s ad-sales business, much similar to what cable giant Comcast (CMCSA - Free Report) , Alphabet (GOOGL - Free Report) division Google and Twitter experienced in the April-June quarter.

Click here to know how Disney’s overall third-quarter fiscal 2021 results are likely to be.

The Walt Disney Company Price and EPS Surprise

The Walt Disney Company Price and EPS Surprise

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

Capacity Limitations at Theme Parks & Closure of Cruise Line May Hurt

Disney reopened two California theme parks on Apr 30, which followed the opening of Disney’s Grand Californian Hotel and Spa (Apr 29). Moreover, the Vacation Club Villa at the Grand Californian resumed operations in the to-be-reported quarter. California’s latest state guidelines permit parks to reopen with 15-35% capacity from Apr 1.

The Zacks Consensus Estimate for Parks, Experiences & Consumer Products revenues is currently pegged at $3.92 billion, indicating growth of 299.7% year over year.

However, reduced capacity due to strict social-distancing norms is expected to have hurt occupancy at its theme parks, thereby negatively impacting top-line growth.

The consensus mark for Parks, Experiences & Consumer Products operating loss is pegged at $69 million compared with the year-ago quarter’s operating loss of $1.96 billion.


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