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Disney (DIS) Q4 Earnings Might Suffer as Disney+ Users Decline
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The Walt Disney Company’s (DIS - Free Report) fourth-quarter fiscal 2023 results, set to be reported on Nov 8, are expected to reflect a declining Disney+ subscriber base amid intensifying competition.
Per a recent JustWatch report, Disney+ had a 12% market share in the streaming space, trailing Warner Bros. (WBD - Free Report) Max (formerly HBO Max), Netflix (NFLX - Free Report) and Amazon (AMZN - Free Report) .
Amazon prime video was #1 in terms of market share (22%) in the United States, followed by Netflix and Max, which had 21% and 15% market share, respectively. The market share of Apple TV+ increased by 1% to 7%.
Our model estimates Disney+ subscriber base to hit 145.1 million compared with 164.2 million reported in the previous quarter, suggesting an 11.6% year-over-year decline.
Disney reported streaming losses that totaled $512 million in its fiscal third-quarter results — about half of the $1.1 billion loss reported in the prior-year period. Despite the narrowing loss, the company continues to shed subscribers.
On Oct 12, DIS announced an increase in subscription costs for Disney+ and price hikes for other Disney-owned streaming services like ESPN+ and Hulu.
Disney+ increased its monthly subscription from $10.99 to $13.99 per month. This marked the second price increase in less than a year, as it was previously raised from $7.99 to $10.99 per month in December 2022. The ad-supported subscription tier for Disney+ remains $7.99 per month, offering a more affordable option.
Internationally, Disney+ is expanding choice and value options with the launch of a new Standard tier, as well as Standard with Ads in select Europe, Middle East, and Africa (EMEA) markets and Canada. The new ad-supported plans start at £4.99/€5.99 per month in EMEA and $7.99/month in Canada.
Disney-owned streaming services Hulu, ESPN+ and Hulu + Live TV have also experienced price hikes. Hulu's monthly subscription cost has also increased from $14.99 to $17.99. The Hulu + Live TV monthly subscription has gone up from $82.99 to $89.99.
Regarding its overall Direct-to-Consumer revenues, which include ESPN and Hulu along with Disney+, our model estimate is presently pegged at $5.66 billion, indicating 15.4% growth year over year.
The company’s focus on sports streaming, particularly Live Sports on ESPN+, is expected to have attracted more subscribers in the to-be-reported quarter. The renewal of the MLB sports rights deal through 2028 and the agreement with Spanish club football’s first division, La Liga, further strengthened the portfolio of its sports content.
Our model suggests total Media and Entertainment Distribution revenues to grow 16.2% year over year to $14.78 billion in contrast to a decline of 0.8% reported in the previous quarter.
Click here to know how Disney’s overall fourth-quarter fiscal 2023 results are likely to be.
Zacks Rank & Estimate Revisions
Disney currently carries a Zacks Rank #5 (Strong Sell).
The Zacks Consensus Estimate for fiscal fourth-quarter earnings has moved down by 9.3% to 68 cents per share over the past 30 days, indicating a year-over-year increase of 126.67%.
The consensus mark for revenues is pegged at $21.32 billion, suggesting growth of 5.79% from the year-ago quarter’s reported figure.
Image: Bigstock
Disney (DIS) Q4 Earnings Might Suffer as Disney+ Users Decline
The Walt Disney Company’s (DIS - Free Report) fourth-quarter fiscal 2023 results, set to be reported on Nov 8, are expected to reflect a declining Disney+ subscriber base amid intensifying competition.
Per a recent JustWatch report, Disney+ had a 12% market share in the streaming space, trailing Warner Bros. (WBD - Free Report) Max (formerly HBO Max), Netflix (NFLX - Free Report) and Amazon (AMZN - Free Report) .
Amazon prime video was #1 in terms of market share (22%) in the United States, followed by Netflix and Max, which had 21% and 15% market share, respectively. The market share of Apple TV+ increased by 1% to 7%.
Our model estimates Disney+ subscriber base to hit 145.1 million compared with 164.2 million reported in the previous quarter, suggesting an 11.6% year-over-year decline.
The Walt Disney Company Price and EPS Surprise
The Walt Disney Company price-eps-surprise | The Walt Disney Company Quote
Disney reported streaming losses that totaled $512 million in its fiscal third-quarter results — about half of the $1.1 billion loss reported in the prior-year period. Despite the narrowing loss, the company continues to shed subscribers.
On Oct 12, DIS announced an increase in subscription costs for Disney+ and price hikes for other Disney-owned streaming services like ESPN+ and Hulu.
Disney+ increased its monthly subscription from $10.99 to $13.99 per month. This marked the second price increase in less than a year, as it was previously raised from $7.99 to $10.99 per month in December 2022. The ad-supported subscription tier for Disney+ remains $7.99 per month, offering a more affordable option.
Internationally, Disney+ is expanding choice and value options with the launch of a new Standard tier, as well as Standard with Ads in select Europe, Middle East, and Africa (EMEA) markets and Canada. The new ad-supported plans start at £4.99/€5.99 per month in EMEA and $7.99/month in Canada.
Disney-owned streaming services Hulu, ESPN+ and Hulu + Live TV have also experienced price hikes. Hulu's monthly subscription cost has also increased from $14.99 to $17.99. The Hulu + Live TV monthly subscription has gone up from $82.99 to $89.99.
Regarding its overall Direct-to-Consumer revenues, which include ESPN and Hulu along with Disney+, our model estimate is presently pegged at $5.66 billion, indicating 15.4% growth year over year.
The company’s focus on sports streaming, particularly Live Sports on ESPN+, is expected to have attracted more subscribers in the to-be-reported quarter. The renewal of the MLB sports rights deal through 2028 and the agreement with Spanish club football’s first division, La Liga, further strengthened the portfolio of its sports content.
Our model suggests total Media and Entertainment Distribution revenues to grow 16.2% year over year to $14.78 billion in contrast to a decline of 0.8% reported in the previous quarter.
Click here to know how Disney’s overall fourth-quarter fiscal 2023 results are likely to be.
Zacks Rank & Estimate Revisions
Disney currently carries a Zacks Rank #5 (Strong Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for fiscal fourth-quarter earnings has moved down by 9.3% to 68 cents per share over the past 30 days, indicating a year-over-year increase of 126.67%.
The consensus mark for revenues is pegged at $21.32 billion, suggesting growth of 5.79% from the year-ago quarter’s reported figure.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar