Disney (DIS) to Report Q2 Earnings: What's in the Cards?

Disney DIS is set to report second-quarter fiscal 2020 results on May 5.

The Zacks Consensus Estimate for earnings stands at 83 cents per share, down 15.3% over the past 30 days and indicating a decline of 48.5% from the year-ago quarter’s reported figure.

The consensus mark for revenues is pegged at $18 billion, implying growth of 20.8% from the year-ago period’s reported figure.

Notably, the company’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters but missed in the remaining one, the negative surprise being 0.6%.
 

The Walt Disney Company Price and EPS Surprise

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

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

Coronavirus Dents Disney’s Q2 Growth

Disney’s top line for the fiscal second quarter is expected to have been negatively impacted by the outbreak of 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. Cancellation of sports events is also expected to have affected its ESPN business.

Disney kept California and Florida parks closed for an indefinite period. The company also shuttered its Paris resort due to the coronavirus (COVID-19) outbreak in mid-March. Its theme parks in Hong Kong, Shanghai and Tokyo too remain closed since late January in response to the health emergency, which had its epicenter in China.

Disney also bore the brunt of coronavirus on ad sales similar to social media companies like Twitter TWTR and Facebook FB.

The Zacks Consensus Estimate for Parks, Experiences & Consumer Products revenues is currently pegged at $5.85 billion, indicating a 5.2% dip from the figure reported in the year-ago quarter.

Disney+’s Solid Content Portfolio to Aid User Growth

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

Notably, Disney+’s closest competitor Netflix NFLX added 15.77 million paid subscribers globally, which surged 64.3% year over year and was better than its guidance of 7 million paid subscriber addition. (Read More: Netflix's Q1 Earnings Miss, Coronavirus Aids User Growth)

Importantly, Disney launched Frozen 2, three months ahead of schedule on Disney+ in the United States on Mar 15 to bolster Disney+ portfolio.

The Zacks Consensus Estimate for DTC & International/Consumer Products revenues is currently pegged at $4.16 billion, indicating 4.4% growth from the figure reported in the previous quarter.

However, Disney anticipates higher operating losses in the DTC & International segment due to the ongoing investments in Disney+ and the consolidation of Hulu.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.


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