DIS - 2Q23

Locator: 44614SW.    

Streaming: link here. Streaming wars. 

With regard to streaming, DIS+ is not the best option in the streaming sector. And, the "streaming sector" is a bad sector in which to be, in the first place. 

Updates

May 11, 2023: WSJ  finally calls it -- investors are spooked by the loss of subscribers. 

Walt Disney shares slid Thursday after the company reported that income from its traditional television business had declined sharply and its streaming segment is still a long way from achieving profitability.

Shares of the entertainment giant closed down 8.7% at $92.31, their largest percentage decline since November 9, 2022, when they fell over 13%.

The stock was the worst performer in the S&P 500 and Dow Jones Industrial Average for the day.

The drop comes despite Disney sharply reducing losses in its streaming business in the second quarter, helped by higher prices for Disney+. But it also lost about 300,000 subscribers in the U.S. and Canada [earlier reports said 600,000], while its global subscriber count was also sliced due to cancellations in India, where Disney last year lost the rights to stream a popular cricket league that powered new sign-ups.

BUD has a problem; DIS has a bigger problem.

May 11, 2023:

DIS is making BUD look great. LOL. 

IIRC: DIS+ lost 600,000 subscribers in the US this last quarter. DIS+ lost four million subscribers in one quarter --  tries to hide the bleeding by saying almost all of that was in India. But 600K in the US is not trivial.

Most interesting: analysts and "Wall Street" are doing what they can to sugar coat this story. Isn't working.

4:32 p.m. CT: 

In addition, the company is already seeing ripple effects from the writers’ strike, including the production shutdowns of Marvel Studios’ “Blade,” which was set to begin filming in Atlanta next month, as well as the Disney+ Star Wars series “Andor." [Not good. The word on the street is that there is "no end in sight" with regard to the strike. Ouch.]

4:29 p.m. CT:  

Additionally, the company plans to remove more content from its streaming platforms, which it expects will result in impairment charges of between $1.5 billion and $1.8 billion. [That doesn't sound good.]

It also plans to roll out a smaller volume of content going forward. [That doesn't souunt good.]

Disney’s linear TV networks posted $6.63 billion in revenue for the period, down 7% from a year earlier. [That's definitely not good.]

Overall, for the three-month period ended April 1, 2023, Disney reported net income of $1.49 billion, or 69 cents a share, compared with $597 million, or 26 cents a share, a year earlier. [Last year, 26 cents; this year, 69 cents, and this year, adjusted, 93 cents. That's good.]

4:20 p.m. CT: it looks like DIS+ and Hulu are now one? Not sure how this is going to work. Waiting for details. It looks like DIS+ will cost more in the future but Hulu stays the same -- doesn't get DIS+. A one-way street as it were, not a two-way street, unless I'm misreading this. 

Disney has a powerful "family" brand and those with kids will like it, but I don't need DIS+. Actually, all I need is Amazon Prime, but I have to admit, without Hulu I would miss sports. 

But at the end of the day, all I really need is Amazon Prime Video which comes "free" with an Amazon Prime subscription. At the end of the day, Amazon Prime is still a much better deal than DIS+ for me.

3:45 p.m. CT:

Wall Street had expected Disney+ subscriptions to grow less than 1% during the quarter to reach 163.17 million users. However, the service saw a 2% decline in memberships, falling to 157.8 million subscribers from 161.8 million as of December 31, 2023.

The majority of these losses came from an 8% drop in membership at India’s Disney+ Hotstar. An additional 600,000 subscribers were lost domestically.

3:30 p.m. CT: 

Comment: once analysts did into these numbers, they're going to see how really bad they really are. No matter how much make-up you put on Minnie, the miss is still a miss.

Original Post

Link here.

Here are what analysts expect:

• Earnings per share: 93 cents per share expected.
• Revenue: $21.79 billion expected.
• Disney+ total subscriptions: 163.17 million expected.