Disney (DIS) will report its fiscal second quarter earnings before the bell on Tuesday — its first earnings report since the media giant successfully fended off a high-profile proxy fight with activist investor Nelson Peltz.
As a reminder, Disney recently adjusted its reporting structure after CEO Bob Iger reorganized the company into three core business segments: Disney Entertainment, which includes its entire media and streaming portfolio; Experiences, which encompasses the parks business; and Sports, which includes ESPN networks and ESPN+.
Over the past year, Disney has been grappling with challenges that include a declining linear TV business, slower growth in its parks business, and profitability hurdles in streaming. But a recent turnaround plan from CEO Bob Iger has investors more bullish in recent months.
Here’s how Wall Street expects Disney to perform, according to consensus estimates compiled by Bloomberg:
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Total revenue: $22.10 billion versus $21.82 in Q2 2023
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Adj. earnings per share: $1.10 versus $0.93 in Q2 2023
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Entertainment revenue: $10.31 billion
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Sports revenue: $4.33 billion
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Experiences revenue: $8.18 billion
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Disney+ subscribers: 4.71 million versus a loss of 4 million subscribers in Q2 2023
Disney’s stock has been on a tear since the start of the year, up about 30% compared to the S&P 500’s (^GSPC) 10% rise over that same time period.
The bullish sentiment has been driven by improved financials along with a slew of fresh announcements the company revealed in February — just ahead of its proxy fight win.
At the time, Disney disclosed a dividend boost and new share repurchase program in addition to confirming it’s on track to meet or exceed its $7.5 billion annualized savings target by the end of fiscal 2024.
The company also announced a $1.5 billion investment into Epic Games and doubled down on sports streaming with the reveal of an upcoming joint venture partnership with Fox and Warner Bros. Discovery. Disney is also working on a separate sports streaming platform for ESPN, set to debut in fall 2025.
“Sentiment has improved, but we do not see much change in the financial outlook, with the biggest question on ESPN OTT still ahead,” Macquarie analyst Tim Nollen wrote in a note to clients ahead of the results.
Related to sports, Disney has reportedly agreed to increase its media rights deal with the NBA to $2.6 billion, up from the previous $1.5 billion. The NBA’s current rights deal expires at the end of next season.
“I don’t know that [Disney has] a lot left in its pocket for this earnings report,” Doug Creutz, managing director at TD Cowen, told Yahoo Finance. “I think numbers will be fine, but I don’t think you’ll see nearly as much ‘new news’ as we did three months ago.”
The company is expected to see a boost in subscriber additions as Charter cable subscribers begin to receive complimentary Disney+ subscriptions as part of their packages.
Disney said it expects to add 5.5 million to 6 million core Disney+ users in the second quarter while Wall Street is more cautious with a consensus estimate just under 5 million, per Bloomberg data.
The company also expects continued positive momentum in average revenue per user, or ARPU, amid recent price hikes and a crackdown on password sharing, which should show more “notable benefits” in the second half of the year.
Disney expects its streaming business to be profitable by the fourth quarter.
Alexandra Canal is a Senior Reporter at Yahoo Finance. Follow her on X @allie_canal, LinkedIn, and email her at alexandra.canal@yahoofinance.com.
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