Time New York: Mon 25 May 10:32 am  |  Save 15% on H&R Block Online


Disney (DIS) Eases Investors’ Minds in Q4


Friday, November 8, 2019

Lots of talk this Friday morning surrounds The Walt Disney Company DIS, which reported fiscal Q4 2019 earnings results yesterday afternoon following the closing bell. Though the entertainment giant had fallen to a Zacks Rank #5 (Strong Sell) with a Value-Growth-Momentum “Style Score” of F ahead of the release, earnings beat estimates by 12.6% to $1.07 per share, on $19.1 billion in quarterly revenues that topped expectations by 0.4%.

But the big story regarding Disney has to do with its massive streaming service overhaul, anchored by the coming Disney+ network which will allow subscribers access to the Star Wars franchise, Pixar films and all things Disney. Distribution for Disney+ will also be allotted to Amazon Prime AMZN, Samsung and LG. Disney also plans to bundle its Hulu streaming service with Fox Corp’s FOXA FX.

That’s a lot of heavy lifting, and the questions it had raised is likely part of the poor showing Disney has endured from analysts of late. However, with its strong showing in its latest quarterly report, Disney may be putting many investors’ minds at ease. After all, with Disney’s massive library of popular content, its move into streaming territory seems like a good decision — progressing into the new world of home entertainment and taking on Netflix NFLX, as only a select few companies could even dare to attempt.

Add in a stellar showing from its Parks, Experiences and Products segment — which grew an impressive 17% year over year — Disney looks to have closed out its fiscal year with real strength. These types of gains go a long way toward investors embracing the company's big move into streaming services.

Yet Disney’s Hulu service gained fewer-than-expected subscribers in the quarter. Its total came in around 500K, which is not insubstantial, but in this modern age of cord-cutting, analysts were looking for more. On the other side, Disney’s ESPN+ brought in 3.5 million new subscribers, way up from the 2.4 million reported in the August quarter. And ESPN had long been the albatross around the neck of Disney’s earnings reports; streaming looks to be at least a near-term salve for this department.

Shares are up 6.5% in today’s pre-market, after having gained 5% following its Q4 release in the after-market yesterday. We look for upgrades to its Zacks Rank and Style Score as analysts process quarterly results. For more on DIS’ earnings, click here.

Mark Vickery

Senior Editor

Questions or comments about this article and/or its author? Click here>>

5 Stocks Set to Double

Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.

Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.

Today, See These 5 Potential Home Runs >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

To read this article on Zacks.com click here.

Zacks Investment Research

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
<-- You can share this post with your network,
or give us your opinion and leave a comment.
Be sure to check our RSS feeds for updates.