ESPN, National Geographic, Marvel, and Lucasfilm are just a few of the brands that fall under The Walt Disney Co. (NYSE:DIS).
And of course, you can’t forget Mickey Mouse himself.
After getting through the pandemic almost unscathed – partially due to the successful launch of Disney+ – Disney fell on tough times…
Bob Chapek, who served as chairman of Disney Parks, Experiences and Products before taking over as CEO, had to deal with a battle regarding the payment of one of its biggest stars and fell into a political battle between Florida and its employees over a controversial bill that was proposed in the state.
This, among other things, caused Disney’s board to remove Chapek and reinstate the prior CEO Bob Iger in November 2020.
Susan Arnold, Chairman of the Board for Disney, said in a statement:
We thank Bob Chapek for his service to Disney over his long career, including navigating the company through the unprecedented challenges of the pandemic. The Board has concluded that as Disney embarks on an increasingly complex period of industry transformation, Bob Iger is uniquely situated to lead the Company through this pivotal period.
Disney’s stock rallied 9% on the news.
And it makes sense: Iger is celebrated as Disney’s most successful CEO. During Iger’s 15-year tenure, he led the charge to acquire major brands like Pixar, Marvel, Lucasfilm and closed the $71 billion deal to buy most of 21st Century Fox. Before he stepped down, he helped create and launch Disney+ in November of 2019.
Last night, Disney reported earnings for its first quarter in fiscal year 2023 – the first since Iger has been back.
In today’s Market 360, we’re going to review Disney’s first-quarter earnings… and reveal whether it’s time to buy “The House of Mouse.”
Disney Reports Better-Than-Expected Results
Amidst the announcement that it will trim 3% – or 7,000 people – from its global workforce, Disney reported better-than-expected results last night.
For the first quarter in fiscal year 2023, Disney reported $0.99 earnings per share, versus expectations for $0.78 earnings per share. The company also reported $23.51 billion in revenue, compared to the $23.37 billion expected – an 8% increase year-over-year.
Disney’s parks, experiences and products divisions, saw a 21% increase in revenue to $8.7 billion.
The company also announced an operating loss of $1.05 billion, below Wall Street estimates of $1.2 billion.
Company management also addressed Disney+ subscriber loss after a recent price hike for the streaming service. The company reported the hike likely led to a loss of around 2.4 million Disney+ subscribers during the quarter, versus the 3 million expected. All in all, Disney+ boasted 161.8 million subscriptions versus the 161.1 million expected.
In a statement ahead of the call, Iger said:
We believe the work we are doing to reshape our company around creativity, while reducing expenses, will lead to sustained growth and profitability for our streaming business, better position us to weather future disruption and global economic challenges, and deliver value for our shareholders…
Our cost-cutting initiatives will make this possible, and while initially it will be a modest dividend, we hope to build upon it over time.
Shares popped 5% in after-hours trading.
So, is it time to buy shares of Disney?
No, not yet.
My Portfolio Grader system is still showing a “D-grade” or sell for Disney:
Will people still take their kids to Disney World? Yes. Will Iger be able to right the ship? Maybe.
The fact is, Disney still has some work to do.
For now, we must remain laser-focused on companies with superior fundamentals to be successful. Companies like the ones on my Growth Investor Buy List.
My Growth Investor stocks are backed by superior fundamentals: 65.5% annual sales growth and 217.7% annual earnings growth. The Growth Investor Buy List has also benefited from positive analyst revisions and wave-after-wave of positive earnings results.
I anticipate that my Buy List companies will continue to release better-than-expected results in the upcoming weeks, which should propel their stocks higher.
To join me at Growth Investor today – and gain access to my entire buy list – click here.
Sincerely,
Louis Navellier
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On the other side, the opposite is happening. Wealth is flowing out of the pockets of ordinary Americans at an unprecedented rate.
What’s happening is only going to gather in strength over the coming decades. It certainly won’t weaken.
Few Americans even know that any of this is going on. I’ve never seen anyone from my side of the chasm step forward to explain any of these things.
It’s why I put together this video. In it, I’ll lay out exactly what is happening, including several key steps every American should take right now.
The Editor hereby discloses that as of the date of this email, the Editor, directly or indirectly, owns the following securities that are the subject of the commentary, analysis, opinions, advice, or recommendations in, or which are otherwise mentioned in, the essay set forth below:
The Walt Disney Co. (DIS)
