Walt Disney: Q4 2022 Earnings Preview

Written by Larince Zhang

The Walt Disney Co., a diversified international family entertainment and media enterprise founded in 1923, shall release its earnings result for fiscal full year and Q4 2022 on 8th November (Tuesday), after market close. The company operates via two main segments: Disney Media and Entertainment Distribution (DMED) and Disney Parks, Experiences and Products (DPEP). The former covers the company’s global film, television content production and distribution activities, while the latter encompasses parks and experiences and consumer products.

Fig 1:Reported Sales of Walt Disney Co. Versus Analyst Forecast. Source: : CNN Business

Despite reported sales that slightly missed consensus estimates in 2021, Walt Disney has delivered satisfactory results throughout 2022 (Q1: $21.8B versus $20.3B; Q2: $20.3B versus $20.1B; Q3: $21.5B versus $21.0B). Analyst forecasts for the sales of Walt Disney in the coming quarter remain flat at $21.3B. In full year 2022, consensus estimates stood at $84.4B, up over 25% from the prior year.

Fig 2:Reported Sales of Walt Disney Co. Versus Analyst Forecast. Source: : CNN Business

On the contrary, EPS of the company missed analyst expectations last year by nearly -7%, at $2.29. This year, its EPS remained flat around $1 for three consecutive quarters, below consensus estimates. In the coming quarter, the market participants expect the EPS to hit $0.55, or $3.79 for the full year of 2022.

In general, the company continued to see significant improvements in attendance, occupied room nights and cruise ship sailings since the reopening of the global economy after the Covid pandemic. The management expected the demand to remain robust going into Q4 2022. Until today, China is the only country that perseveres with the zero-Covid policy. It is still unclear when the policy shall end, however one thing that is certain is that once the Chinese government allows reopening of the economy, this shall further benefit Disney especially in the tourism sector.

In the previous quarter, the company’s Disney+ subscriptions rose to 152.1 million, better than consensus estimates. Nevertheless, operating losses were still the main problem, which led the company to unveil a new ad-supported pricing structure beginning in December this year. The management expected to see Disney+ to become profitable by the end of its fiscal 2024 year.

Technical Analysis:

Disney ($DIS) share price closed below the low estimates of analysts ($105) and $105.60 (FR 78.6%) resistance. The psychological level $90 marks the nearest support to watch. Breaking below this level shall indicate the asset price will continue extending losses towards the next support at $79.05 (March 2020 low).  On the other hand, a close above the said resistance shall indicate a short-term technical rebound. Resistance includes $126.40 (FR 61.8%) and $141 (FR 50.0%).

About the author

Larince Zhang

Larince entered the world of live market analysis and trading in 2013. Her passion ranges from foreign exchange to commodities, indices and futures as well as stocks. Having a Bachelor Degree majoring in Banking and Finance, she strives to make full use of her learned knowledge together with practical trading to achieve a more comprehensive market analysis.

Through years of trading experience, she believes “Simple is Best”, as the market is driven by human activity. It is human psychology that one should opt to improve on instead of mere technical or fundamental analysis. She believes in three core elements to a mature trading approach – scrupulous trading mindset, well-planned strategies and strict money management.