Walt Disney (DIS) Earnings Preview: YouTube Dispute, Parks Attendance & ESPN

Walt Disney (DIS) is scheduled to report 4Q earnings tomorrow morning, one of the last remaining blockbuster companies this season. Zacks expects it to post EPS of $1.03 (-10% year over year) and revenue of $22.88 billion (+1% vs last year). Part of this is due to difficult comps, but Disney is facing competition, reduced consumer spending, and more issues.

Also of note: CEO Bob Iger’s contract is up at the end of 2026, and the company is expected to announce a successor early next year. The last time Disney tried to replace Iger did not go well, and it may be feeling the pressure on this second choice.

Fox recently reported that Disneyworld Park attendance fell to lows in September, with some fans describing it as a “ghost town.” Half of consumer spending is coming from the top 10% of earners – and while they may be booking more complex and expensive trips, Disney needs the numbers. A survey by Lending Tree showed that nearly half of families that visit Disneyland go into debt for the trip. Critics have complained about high prices and wait times for years: is this the start of a trend, or a hiccup?

Disney is shifting some things around on the entertainment side, too. ESPN is getting a new streaming platform, and it is raising prices for Disney+. ESPN is an asset Disney has struggled with for years as other streaming services take a bite out of sports rights. However, with this refresh, a Rosenblatt analyst thinks the new platform can hit 500K subscribers in its first launch quarter and “drive nearly $500M in new revenue” in 2026.

On the other hand, it could see a dip in subscribers from the Jimmy Kimmel suspension, and it entered a carriage dispute with YouTube on October 30. Disney is reportedly losing $30 million every week the YouTube TV blackout lasts. This won’t show up in the numbers this quarter, but could hit 2026 guidance. YouTube, just as much if not more than Disney, has captured the younger audience, and it will be interesting to watch the two powers duke it out.

Overall, Disney seems on the precipice of major changes coming next year. A transition time is never easy for a company, and investors will be watching their direction closely. The stock is up 3% this year and around 16% vs last year. The options market is implying a +/- $7 move, or about a 6% move. The company has been around for over a century, but can it hold onto its cultural dominance?

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