Walt Disney (NYSE:DIS) posts Q4 beats ahead of Disney+ launch

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Updated: 11 November 2019


  • Media giant will launch new subscription service on Tuesday
  • Delivers $1.07 earnings per share and $19.1bn revenue in Friday’s Q4 report
  • Shares rise 4.72%, stock up 26% since 1st January 2019


Walt Disney Co. (NYSE:DIS) will go into this week’s Disney+ subscription service launch on a high after beating the Wall Street consensus on both earnings and revenue in Q4.

Early on Friday, the mass media and entertainment giant posted $1.07 Non-GAAP EPS and $19.1bn group revenue for the three-month period to 30th September 2019.

Earnings were down 27.7% year-over-year but comfortably ahead of the $0.95 forecast, while revenue soared 34% to pass the pre-report analyst tally by $80m.

All eyes are now on the arrival of Disney+, a hotly anticipated TV and film service that will take on the biggest players in the streaming industry, including Netflix (NASDAQ:NFLX) and Amazon (NASDAQ:AMZN).

The service will launch on Tuesday (12th November) in the US, Canada and the Netherlands before rolling out in New Zealand and Australia (19th November).

Western Europe will have to wait until next year (March 31st 2020) to get its Disney+ fix.

CEO Robert Iger said that the new SVOD offering is “ready to go” and that a last-minute deal with Amazon will see it distributed on Fire TV in addition to platforms owned by Google (NASDAQ:GOOGL), Apple (NASDAQ:AAPL), Roku (NASDAQ:ROKU) and Microsoft (NASDAQ:MSFT).

The robust Q4 showing did little to sway analysts who are waiting to see the “level of success” that Disney+ can achieve in the streaming marketplace.

Credit Suisse analyst Douglas Mitchelson, reiterating an Outperform rating and $150 price target, expects the service to gain around 6.8 million subscribers in Q1 and for that figure to swell to 15.5 million by the end of FY 2020.

J.P. Morgan said that Disney is “impressively balancing strong growth” in the core of its business but also opted to remain unmoved at Overweight and a $150 PT.

Disney continues to benefit from its Fox acquisitions after its TV networks and film studio enjoyed a stellar quarter, but there was strength across the board as a number of segments performed better compared to the same period in 2018.

Media Networks saw revenue spike 22% to $6.51bn, while Parks, Experiences and Products ($6.66bn, +8%) and Studio Entertainment ($3.31bn, +52%) buffeted by a string of blockbuster hits including Toy Story 4and The Lion Kingalso grew.

Direct-to-Consumer and International delivered the biggest gain of 316% as revenue climbed to $3.43bn.

The impressive showing gave Disney a head start in pre-market trading on Friday, and shares eventually moved 4.72% higher after the first bell, which extended its year-to-date rise to 26%.

Stock was valued at $139.44 per share.

In a conference call, Iger said that there has been a “historic effort” to drive awareness, reach and demand for Disney+ and that it is now focused on launching big and scaling fast.

He added: “We spent the last couple of years completely transforming the Walt Disney Company making strategic acquisitions and organizational changes to focus the resources and immense creativity across the entire company on delivering an extraordinary DTC experience unlike anything else in the market.”