3 Things to Know before Disney’s Earnings Report



Walt Disney (NYSE:DIS) plans to release its earnings results for the first quarter of fiscal 2020 on Tuesday. Usually, the company’s earnings reports have triggered big movements in the stock. The stock rose by about 4.0% after Disney reported its results for the fourth quarter of fiscal 2019, which beat Wall Street’s expectations.

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Disney’s earnings expectations

Disney’s earnings report will be for the three months through December. Wall Street expects the company to report an EPS of $1.46 on revenue of $20.8 billion for the first quarter of fiscal 2020. For the first quarter of fiscal 2019, Disney posted an EPS of $1.84, which beat Wall Street’s expectation at $1.55. The revenue was $15.3 billion, which easily beat the expectation at $15.1 billion.

Disney+ subscription and expansion

Disney’s earnings will be the company’s first since the launch of Disney+. The service debuted on November 12 to a hot start. Notably, the service signed up over 10 million subscribers on the first day. When Disney reports earnings tomorrow, investors will be looking for updates on Disney+ subscriber metrics.

Investors will focus on the Disney+ rollout plan. Last month, the company changed its mind on the Disney+ rollout date for France and other European countries. Disney+ is also expected to launch in India this year but no date has been provided. Currently, Disney+ has launched in five countries, compared to Netflix which has rolled out in more than 190 countries. Netflix has over 167 million subscribers worldwide.

Hiccups in China

Disney’s earnings will arrive after the company moved to close its theme parks in Hong Kong and Shanghai. The company decided to temporarily shut down the parks to control the spread of the deadly coronavirus. Lately, the company has taken financial hits from its Hong Kong park business due to anti-government protests. In Hong Kong, Disneyland’s operating profit fell by $55 million in the fourth quarter of fiscal 2019, which ended in September. Disney projected that the Hong Kong park’s operating profit could shrink by $80 million in the first quarter of fiscal 2020. The company was concerned that the operating profit from the Hong Kong park could drop by $275 million in fiscal 2020.

In addition to the protests, shutdown risks threaten the park’s business in Hong Kong.

Disney stock fell 4.37% in January, which marked a slow start to 2020. Investors hope that Disney’s earnings will be strong enough to lift the stock.


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