GhostHost1000
Premium Member
wow not even a continental character breakfast... bummer
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Disney’s Q3 FY24 Earnings Results Webcast
- Thread starter DCBaker
- Start date
BrianLo
Well-Known Member
A couple of things I think are worth highlighting so they are not overlooked
1) Pandora received the highest guest surveys reviews of anything at WDW in 2024 (still!)
2) DL 70th featuring spells good things they may do this anniversary right and it at least helps one half of the domestic equation next year.
3) I don’t think D+ ad tier does as well as Netflix. They were really dancing around that, but I think Wall Street was indirectly noticing. I thought it was curious that the ad pricing has exceeded Netflix. But Netflix is clearly successful at capturing people in watching loops and the ad tier does far better for them.
4) There is a lot of improvement that needs to occur at D+ ARPU, which is where I think the majority of the moderate term growth can come from. I’d say D+ ARPU is actually relatively weak.
1) Pandora received the highest guest surveys reviews of anything at WDW in 2024 (still!)
2) DL 70th featuring spells good things they may do this anniversary right and it at least helps one half of the domestic equation next year.
3) I don’t think D+ ad tier does as well as Netflix. They were really dancing around that, but I think Wall Street was indirectly noticing. I thought it was curious that the ad pricing has exceeded Netflix. But Netflix is clearly successful at capturing people in watching loops and the ad tier does far better for them.
4) There is a lot of improvement that needs to occur at D+ ARPU, which is where I think the majority of the moderate term growth can come from. I’d say D+ ARPU is actually relatively weak.
doctornick
Well-Known Member
I actually think the earnings report is probably about as good as we can hope in terms of being optimistic for substantial parks investment.
Look, no matter what, it's always possible that this leadership could just say "screw it, bleed the parks dry" and cut as much to the bone and try to wrangle out every last penny in the short term. I can understand people feeling that is what to expect - and maybe that's right.
But they've been on record as stating they plan to invest heavily in the parks the next decade. If the parks were doing great - increased attendance and revenues, etc - then I think the response would be to just increase prices, make marginal investments and let the dollars roll in. The report doesn't show that. Just continuing on doesn't seem like a viable course.
If the parks were doing horrible - profits greatly diminished or even showing a loss - then they'd feel obligated to turn that around. Try to reduce spending and eek out any improvement to revenue and operating profit/loss in the short term to appease Wall St. They'd be desperate.
But the report today is probably in just the right zone for hoping for the company to invest in the parks the way we all want. There's still strong profits being made - $2.22B in profit for the segment this quarter of which $1.35B is from the domestic parks (and cruise line) - so there's a cushion where they can absorb increased spending. But with declining attendance and soft revenue they know they need to "turn around" customer trends and attitudes. They kind of need to do something big and they are still in a strong enough financial position where they can do something big.
I guess we will see in a few days, but this feels to me to be a perfect illustration of why they need and intend to invest, not an excuse to not invest.
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BrianLo
Well-Known Member
Exactly. A softer demand period after proving parks are a growth engine seems a bit Goldie locks.
The ones who are going to feel more Wall Street ire (and they absolutely should not, but will), are the ones about to launch a huge product into a soft market. Disney isn't really launching anything of cost for the next three years.
Well, other than cruise ships, but that market is not soft.
GhostHost1000
Premium Member
Sir_Cliff
Well-Known Member
Indeed. It seems like a few people on here are commenting on a different earnings report.
Based on this one, they can say the parks are still wildly profitable even in challenging circumstances and there is a case to invest in order to drive continued demand. If you had to be responsible for explaining the performance and justifying future strategies for either Disney's or Universal's parks and resorts division, you'd much rather be responsible for the former based on the past quarter.
TalkingHead
Well-Known Member
What’s up with the stock? Is D+ off track for profitability? Thought that was the metric Wall Street cared about this year.
doctornick
Well-Known Member
Streaming collectively was profitable this quarter. IIRC, this is the first time it has turned a profit in a quarter.
BrianLo
Well-Known Member
It appears to be all US recession fears and travel industry slow down fears. Along with never really having any streaming pricing momentum to begin with.
I actually don't think it's a bad thing the stock is finally reacting to parks, for once. It motivates change.
Though again box office seems to matter not one iota. Almost inversely correlated.
TalkingHead
Well-Known Member
Gotcha. Collectively, so not D+ especially I take it.
No, they care about big dividends and ever-increasing profits from all divisions of the company.
Stripes
Premium Member
Pretty great quarter considering the travel headwinds facing the whole industry. Universal’s parks division income during the same quarter was down 25% vs Disney’s down 3%.
Warner Bros. Discovery is what happens when you have a terrible CEO like Zaslav or Chapek. Iger is steering the ship in a great direction and I’m confident D23 will prove that in the coming days.
Without Iger’s moves Disney could be facing the same fate as WBD.
Warner Bros. Discovery is what happens when you have a terrible CEO like Zaslav or Chapek. Iger is steering the ship in a great direction and I’m confident D23 will prove that in the coming days.
Without Iger’s moves Disney could be facing the same fate as WBD.
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doctornick
Well-Known Member
I might be missing it, but I didn't see a breakdown between Disney+ vs Hulu. Collectively though those two lost money to the tune $19M this quarter; I would agree that it is likely that Disney+ alone is not profitable yet but edging closer.
Tha Realest
Well-Known Member
not mentioned today
Tha Realest
Well-Known Member
Must’ve slipped his mind.
Stripes
Premium Member
Yes. I’m in Disney over the long term. And I put in another order today. I have confidence in the future of this company but I’m also very cognizant of the immediate challenges facing the entertainment industry. When the upheaval is over, Disney will come out of it a clear winner.
At Disney’s current price, the stock is a bargain. In my opinion.
TP2000
Well-Known Member
A few weeks ago in the Disneyland attendance thread, I surmised the notable slowdown in attendance in Anaheim this summer was not due to Pixar Fest being stupid, but rather due to the past two years of high inflation finally taking its toll on middle class Americans. When groceries are up by 20%+ and gas and energy costs are up by 30%+, something has to give in the family budget. Disneyland can be replaced with mini-golf, and WDW can be replaced with camping at the lake.
It appears this afternoon the financial press is also going with that thesis on why Disney Parks are slowing down....
www.businessinsider.com
It appears this afternoon the financial press is also going with that thesis on why Disney Parks are slowing down....
Disney's theme parks are struggling, and it's another warning sign for the economy
The entertainment giant reported weaker-than-expected results in its theme parks division, highlighting a broader consumer spending pullback.
www.businessinsider.com
Bloomberg - Are you a robot?
www.bloomberg.com