the (Walt Disney)， A diversified international family media and entertainment corporation established since 1923, will release its earnings results for the second quarter of 2023 on May 10 (Wednesday), after market close. The company operates through two main divisions: Disney Media and Entertainment Distribution (DMED) and Disney Parks, Experiences and Products (DPEP). The first covers the company’s global film and television content production and distribution activities, while the second includes its theme parks, experiences, and consumer products activities.
Figure 1: Walt Disney’s revenue (in billions of US dollars). source: nation
Walt Disney was born $23.5 billion Revenue in the first quarter of 2023, an increase 16.67% From the previous quarter and up 7.75% From the same period last year. According to the official report, $8.7B Revenue generated from the Disney Parks segment, and up 21% from the previous quarter. This also reflects the increase in the operating income of the segment 25% (q / q) to $3.1 billionsupported by higher guest volume and guest spending at hotels, theme parks and cruises.
Figure 2: Revenue and Operating Income, Disney Media and Entertainment. source: Walt Disney
Conversely, the company’s media and entertainment distribution business had just a 1% increase in total revenue for the quarter, to $14.8 billion. Both domestic and international channels posted losses, sending linear networks down -5% (QoQ) to $7.3 billion. Segment operating income also decreased by 16% (QoQ) to $1.3 billion. Although Direct-to-Consumer (DTC) reported a quarterly gain of 13% to $5.3 billion, its operating loss expanded to $1.1 billion (previously $0.59 billion), after higher programming and production costs. and lower advertising revenue. These costs were so significant that they could not be fully offset by subscription revenue growth and lower marketing costs.
Figure 3: Disney Plus subscribers. source: nation
The company reported a loss of affinity 2.4 million On Disney + subscribers 161.8 million in the prior quarter, which is believed to have resulted from the recent hike in pricing for the streaming service. DTC’s other products, ESPN+ and Hulu, scored a percentage 2% An increase in the number of subscribers 24.9 million And 48.0 millionrespectively.
Figure 4: Average monthly revenue per paid subscriber for DTC products. source: Walt Disney
In terms of average monthly revenue per paid subscriber, Disney+ reported losses in its domestic and international segments, at -2% And -4%l $5.95 And $5.62respectively, while ESPN+ and Hulu rose 14% And 2%l $5.53 And $12.46respectively.
Figure 5: Reported sales and EPS for The Walt Disney Company versus analyst expectations. source: CNN Business
cost-cutting measures she main priority The Walt Disney Company is in the midst of the threat of a recession. The company must resume Third wave of layoffs 7,000 before the start of summer. Also, there will be a $3 billion drop in content spending and other non-content cuts that will hopefully make the streaming business profitable in the long run.
Analysts’ forecasts are not optimistic either. consensus ratings for sales From Walt Disney $21.8 billionunder -7.23% from the previous quarter. In the same period last year, sales were $20.3 billion. EPS It was expected to remain constant at $0.95almost constant compared to the previous quarter ($0.99) and down -12% From the same period last year.
Technical Analysis:
#Disney (dis) The share price has been consolidating in a relatively low area since the latter half of 2022. The past year witnessed its lowest level in the past year $84.05along with the March 2020 low ($79.05) forms a strong support area to watch, should the asset crash $91.50 before. A break below the blue support area may indicate further downward pressure towards the next support level at $63.80. on the contrary, $105.60 as the nearest resistance. A break above this level may encourage bulls to test $117.75which is the highest point seen so far this year, followed by $126.40 The dynamic resistance is the 100-week simple moving average.
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Larence Chang
Market analyst
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