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Key Takeaways
- Analysts expect Walt Disney Co. to report marginal year-over-year improvement in net income and revenue when it releases fiscal first quarter 2024 results on Feb. 7.
- While cable cord-cutting and a lackluster holiday box office could damp its end-of-year performance, Disney is seen posting solid increases in direct-to-consumer streaming revenue.
- Disney faces a proxy battle with activist investor Nelson Peltz, whose Trian Fund Management recently sought three seats on the media giant’s board.
Walt Disney Co. (DIS) is expected to eke out modest revenue and net income gains year-over-year (YOY) when it reports first-quarter fiscal 2024 earnings results after market close on Feb. 7. The media giant had a relatively lackluster 2023 holiday box office and cable cord-cutting continues to affect its legacy networks.
Disney is forecast to post net income attributable to the company of $1.82 billion, up just a fraction of a percent compared with the prior-year quarter. Earnings per share (EPS) is expected to come in at 84 cents, compared with 70 cents the same time last year. Analysts predict that Disney will report revenue of $23.72 billion, up just under 1% YOY. This would be the slowest pace of growth since the company returned to revenue gains nearly three years ago.
| Analyst Estimates for Q1 FY2024 | Q4 FY2023 | Q1 FY 2023 | |
|---|---|---|---|
| Revenue | $23.72 billion | $21.24 billion | $23.51 billion |
| Earnings Per Share | 84 cents | 14 cents | 70 cents |
| Net Income | $1.82 billion | $1.5 billion | $1.81 billion |
Key Metric: Direct-to-Consumer (Entertainment) Revenue
While a general shift away from traditional cable services has weighed on some of Disney’s legacy entertainment offerings, the company has made great strides with its direct-to-consumer segment, including streaming offerings such as Disney+, ESPN+, and Hulu. Growing its customer base within the highly competitive streaming landscape is key to driving revenue growth, both through subscription fees and advertising sales for ad-supported plans.
Disney is forecast to report direct-to-consumer entertainment revenue of $5.45 billion for the most recent quarter, the highest figure from this category to date. This represents an increase of 13% year-over-year.
Business Spotlight
In recent months, Disney has faced the latest highly publicized proxy battle launched by activist investor Nelson Peltz. In the final weeks of 2023, Peltz’s Trian Fund Management pushed for three seats on Disney’s board. By early January, Disney had received support from hedge funds ValueAct Capital Management L.P. and Blackwells Capital LLC against Peltz’s challenge.
Disney shares have declined by roughly 11% in the last year as of early Monday.