Markets

Coronavirus Dampens Disney's (DIS) Projections in Q3 Earnings

Disney’s DIS third-quarter fiscal 2020 results are expected to reflect setbacks it suffered from the closure of its theme parks and cruise ships, as well as the postponement of movie releases due to the coronavirus outbreak.

The company kept California and Florida parks closed in the to-be-reported quarter, while Shanghai and Hong Kong parks were reopened on May 11 and Jun 18, respectively.

However, reduced capacity due to strict social-distancing norms is expected to have hurt occupancy, thereby negatively impacting top-line growth.

The Zacks Consensus Estimate for Parks, Experiences & Consumer Products revenues is currently pegged at $899 million, significantly down from $6.58 billion reported in the year-ago quarter.
 

The Walt Disney Company Revenue (TTM)

The Walt Disney Company Revenue (TTM)

The Walt Disney Company revenue-ttm | The Walt Disney Company Quote

 

Click here to know how Disney’s overall third-quarter fiscal 2020 results are likely to be.

 

Ad Revenues Hurt by Coronavirus

Moreover, lower ad demand and spending is expected to have hurt Disney-division ESPN’s ad-sales business, much similar to what cable giant Comcast CMCSA, Alphabet GOOGL division Google and Twitter TWTR experienced in the April-June quarter.

Notably, Comcast’s advertising revenues declined 29.6% year over year due to lower advertiser spending.

Notably, Google announced second-quarter ad revenues of $29.87 billion, down 8% year over year. Further, Twitter’s second-quarter advertising revenues declined 23% to $561.9 million.

However, resumption of football leagues in Europe, particularly English Premier League in June, is expected to have increased viewership in India, where the broadcast rights are owned by Star Sports.

The Zacks Consensus Estimate for Media Networks revenues is currently pegged at $6.56 billion, suggesting decline of 2.3% from the figure reported in the year-ago quarter.

Studio Entertainment Revenues to Decline

Disney’s Studio Entertainment segment revenues are expected to decline due to lack of any major release amid shutdown of movie halls beginning mid-March.

The coronavirus outbreak forced Disney, which has a Zacks Rank #5 (Strong Sell), to suspend the release of Mulan and reschedule other upcoming releases including Marvel’s Black Widow.

The Zacks Consensus Estimate for Studio Entertainment revenues is currently pegged at $2.02 billion, suggesting decline of 47.2% from the figure reported in the year-ago quarter.

Disney+’s Solid User Base to Boost Top Line

Notably, as of May 4, Disney+’s subscriber base had reached 54.5 million, triggered by higher media consumption during lockdowns and on the following of pandemic-related physical-distancing norm.

Disney released much-anticipated Artemis Fowl on the streaming platform during the to-be-reported quarter. Further, Pixar’s Onward was added to the Disney+ library within a few weeks of its release after the movie’s theatrical run was dampened by the closing down of theatres.

Moreover, Disney+ debuted in Japan during the to-be-reported quarter. This expansion is likely to have aided subscriber base.

The Zacks Consensus Estimate for DTC & International/Consumer Products revenues is currently pegged at $4.43 billion, indicating 14.8% growth from the figure reported in the year-ago quarter.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

 

Breakout Biotech Stocks with Triple-Digit Profit Potential

The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.

Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +50%, +83% and +164% in as little as 2 months. The stocks in this report could perform even better.

See these 7 breakthrough stocks now>>


Click to get this free report

Comcast Corporation (CMCSA): Free Stock Analysis Report

The Walt Disney Company (DIS): Free Stock Analysis Report

Alphabet Inc. (GOOGL): Free Stock Analysis Report

Twitter, Inc. (TWTR): Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Other Topics

Stocks

Latest Markets Videos

Zacks

Zacks is the leading investment research firm focusing on stock research, analysis and recommendations. In 1978, our founder discovered the power of earnings estimate revisions to enable profitable investment decisions. Today, that discovery is still the heart of the Zacks Rank. A wealth of resources for individual investors is available at www.zacks.com.

Learn More