Disney (DIS) Q1 Earnings Preview: Media Networks, Studio, Parks & More

Disney (NYSE:DIS) is scheduled to report its Q1 fiscal 2019 financial results after the closing bell on Tuesday, February 5. Shares of DIS have surged 11% since Christmas, along with giants like Facebook (NASDAQ:FB) and Google (NASDAQ:GOOGL) . Disney is also coming off a strong fourth quarter.

So, let’s see what to expect from the entertainment giant as it prepares to enter the streaming TV market to challenge Netflix (NASDAQ:NFLX) , Amazon (NASDAQ:AMZN) , AT&T (NYSE:T) , and Apple (NASDAQ:AAPL) .

Outlook

Disney’s fiscal Q1 revenues are projected to slip 1.1% from the year-ago period to hit $15.18 billion. This would mark a significant downturn from Q4 2018’s 12% top-line expansion, which blew away estimates on the back of strong box office performances.

At the bottom end of the income statement, DIS’ adjusted quarterly earnings are projected to plummet 16.9% to $1.57 a share. Last quarter, the company’s adjusted EPS figure soared 38% and crushed our Zacks Consensus Estimate.

On top of these projected top and bottom-line declines, investors need to know how Disney’s individual business units are expected to perform. Luckily, we can turn our exclusive non-financial metrics consensus estimate file for help. The Zacks Consensus NFM file contains detailed estimate data for business segment metrics and non-financial metrics reported by companies. The data is acquired from digest and contributing broker models and includes the independent research of expert stock market analysts.

Media Networks

Disney’s Media Networks unit is the company’s largest segment and is comprised of its cable and broadcast division, which includes ESPN. This unit is projected to see its revenues climb roughly 0.7% from the year-ago period to reach $6.288 billion. This vital division’s revenues popped 9% to $5.963 billion last quarter.

More specifically, Disney’s cable unit is expected to climb about 0.5% to $4.518 billion. Meanwhile, the broadcast division is projected to pop just over 1% to reach $1.770 billion. Both of these estimates mark slowdowns from Q4’s 5% and 21% respective expansions.

Parks and Resorts

Moving on, Disney’s Park and Resorts revenues are projected to climb 8.5% to reach $5.591 billion. Last quarter, the theme park unit also popped 9%, but fell short of our NFM estimate.

Studio Entertainment

Lastly, let’s look at the company’s most volatile unit, Studio Entertainment. The division is prone to major quarterly swings and big surprise, in either direction, based on the nature of movie release schedules and box office hits. With that said, Studio Entertainment revenue is projected to sink roughly 15% from the year-ago quarter to $2.115 billion. As we touched on at the top, the division’s revenues skyrocketed 50% last quarter.

Bottom Line

Shares of Disney closed regular trading Friday down marginally to $111.30 a share, which marked a 7.5% downturn from its 52-week high of $120.20. Disney is currently a Zacks Rank #3 (Hold) that sports a “B” grade for Growth in our Style Scores system.

Disney is currently scheduled to release its first-quarter 2019 financial results after the closing bell on Tuesday, February 5. Make sure to come back to Zacks for a full breakdown of the company’s actual results.

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