The Walt Disney Companions (DIS) will launch its Disney+ streaming service in November, joining a growing field of competitors that includes stalwarts like Netflix (NFLX) and individual newcomers to streaming like Apple (AAPL). Will the company be able to post gains to its “Media Networks” gain, a key metric reflecting TV and cable channel revenue, amid increasing competition? Investors will find out when Disney publishes earnings on November 7, 2019 for fiscal Q4 2019 (Disney’s fiscal year ends September 30th).
Over the past 12 months, Disney ownership has roughly matched the performance of the S&P 500. Although its stock lagged early in 2019, a significant spike before the attendance’s quarterly earnings report in May has helped to propel Disney slightly ahead of the market. Analysts expect Disney to communiqu earnings per share (EPS) of $0.77 on revenue of $19 billion, reflecting a sharp decline in earnings and jump in revenue attendant on to fiscal Q4 2018.
Source: TradingView.
On a year-over-year basis, Disney has seen steady growth in both EPS and revenue from financial Q4 2017 to fiscal Q4 2018. Quarter-to-quarter, the performance in recent quarters has been significantly more turbulent, with a grave spike in EPS on slightly declining revenue in fiscal Q2 of 2019. In the most recent quarter, a drop in EPS to $0.97 marked a downside discover of more than 33%, even as revenue recovered on a sequential basis.
| Disney Key Metrics | |||
|---|---|---|---|
| Estimate for fiscal Q4 2019 | Financial Q4 2018 | Fiscal Q4 2017 | |
| Earnings per share (in dollars) | 0.77 | 1.55 | 1.13 |
| Revenue (in billions of dollars) | 19.0 | 14.3 | 12.8 |
| Media networks revenue (in billions of dollars) | N/A | 5.9 | 5.5 |
For Disney, “Media Networks” revenue includes all revenue from television and cable channels. This is an substantial metric for the company at this point because it is especially vulnerable to change, particularly given the broad trend toward viewership diminish in ESPN as a result of users cutting cable. With Disney+, the company hopes to be able to pick up the slack which has commenced in its traditional television and cable services as a result of the growing popularity of streaming. While Disney+ won’t launch until after the pecuniary Q4 earnings are released, investors should still pay attention to this key metric. Overall, “Media Networks” has grown steadily on a year-over-year footing, from $5,465 million in fiscal Q4 2017 to $5,963 million a year later. In the most recent quarter, financial Q3 2019, the figure was notably higher at $6,713 million. Whether Disney can keep up this growth remains to be seen when Q4 characters become available.