Walt Disney (NYSE:DIS) is set to report its first quarter results on Wednesday and investors will focus on the media conglomerate’s guidance amid its recent password crackdown as well as any updates on its recent strategic actions.
Wall Street expects Disney to report earnings per share (EPS) of $1.04, while revenue is expected to grow just 1.2% at $23.79 billion.
Earlier in the month, Disney announced new measures to crack down on password sharing for its streaming services, including Hulu, Disney+, and ESPN+.
The move aims to enhance the profitability of Disney’s streaming business and aligns with the industry trend following Netflix’s implementation of similar restrictions. The company is also facing a proxy battle from activist investors Nicholas Peltz to gain two seats on the company’s board.
“The promising trajectory of the video streaming business, which is expected to achieve profitability this year, is complemented by the resilience of the “Experiences” cash cow, encompassing the iconic Disney theme parks and resorts,” pointed out a recent Seeking Alpha analysis.
In order to stem losses, Disney is also focusing on some strategic actions including partnerships for its sports-broadcasting platform ESPN as well as reportedly selling its operations in India to multinational conglomerate Reliance Industries, run by Mukesh Ambani.
Wells Fargo analyst Steven Cahall said that investors are looking for execution on cost cuts especially at direct-to-consumer segment.
Over the last two years, Disney has beaten EPS estimates 63% of the time and has beaten revenue estimates 50% of the time.
Seeking Alpha and Wall Street analysts rated the stock Buy, while Seeking Alpha’s Quant Ratings consider it a Hold, with a score of 3.33 out of 5.
The stock has lost over 11% in the last one year, compared to the 20% gain in the broader S&P 500 Index.
Over the last three months, EPS estimates have been revised upward once compared to 12 downward revisions, while revenue have seen no upward revisions versus 10 downward moves.