It’s hard to understate the importance of earnings season, with investors finally getting a peek behind the scenes of business conditions.
So far, we’ve received plenty of quarterly results, with just as many slated to report in the upcoming weeks.
A widely-popular company, The Walt Disney Co. DIS, is on deck to unveil quarterly results this week on Wednesday, February 8th, after the market close.
The Walt Disney Co. has assets spanning movies, television shows, and theme parks. The company’s premium streaming service, Disney +, has been a significant hit among consumers.
How does the company currently stack up? We can use results received from Netflix NFLX as a small gauge.
Netflix Posts Strong Subscriber Additions
Netflix reported mixed top and bottom line results, falling short of the Zacks Consensus EPS Estimate by a fair margin. Quarterly revenue totaled $7.8 billion, modestly ahead of estimates and growing 2% year-over-year.
Image Source: Zacks Investment Research
However, the focus point of the entire release remained the company’s Net Subscriber Additions. Results came in well above expectations; Netflix reported Net Subscriber Adds of roughly 7.7 million, handily beating our consensus estimate of 4.5 billion by nearly 70%.
It represented the company’s third consecutive quarter exceeding our consensus estimate for Net Subscriber Additions, undoubtedly a major positive. This is illustrated in the chart below.
Netflix - Net Subscriber Adds Surprise %
Image Source: Zacks Investment Research
The market cheered on the better-than-expected Subscriber Additions, with Netflix shares climbing nearly 9% the following trading session.
Now, let’s take a look at Disney.
Disney
For the quarter, the Zacks Consensus Estimate for total Disney+ subscriptions stands at 157 million, suggesting a 20% improvement from the year-ago quarter. It’s worth mentioning that the company has consistently positively surprised on this metric, as we can see in the chart below.
Walt Disney - Total Disney+ Subscribers Surprise %
Image Source: Zacks Investment Research
Analysts have been bearish for the quarter to be reported, with five negative earnings estimate revisions hitting the tape over the last several months. The Zacks Consensus EPS Estimate of $0.69 indicates a pullback of roughly 35% year-over-year.
Further, our consensus revenue estimate stands at $23.3 billion, suggesting an improvement of 7% year-over-year.
Image Source: Zacks Investment Research
As of late, Disney has posted mixed quarterly results, falling short of earnings and revenue expectations in two of its last four releases.
In its latest print, DIS fell short of the Zacks Consensus EPS Estimate by 40% and reported revenue 4.5% below expectations.
Image Source: Zacks Investment Research
In addition, the company’s shares currently trade at a 2.2X forward price-to-sales ratio, below the 3.1X five-year median and above the Zacks Consumer Discretionary sector average.
DIS carries a Style Score of “D” for Value.
Image Source: Zacks Investment Research
Putting Everything Together
Many companies have unveiled their quarterly results so far, with the feared earnings “apocalypse” yet to materialize.
Now, The Walt Disney Co. DIS is on deck to unveil quarterly results on Wednesday, February 8th, after the market close.
We’ve already received results from a peer, Netflix NFLX, with the market cheering on its subscriber results despite falling short of earnings estimates.
Analysts have been bearish for Disney’s upcoming quarter, with estimates indicating a pullback in earnings but an uptick in revenue.
Additionally, the company has primarily posted mixed results as of late, falling short of both earnings and revenue expectations in its latest release.
Heading into the print, The Walt Disney Co. is a Zacks Rank #4 (Sell) with an Earnings ESP Score of -3.4%.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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