The Walt Disney Company Gives Its Earnings Report Next Week- Here’s What Investors Are Looking For
Disney is hitting a very important deadline next week. According to a recent piece in Motley Fool, the company will be announcing its second-quarter earnings report on May 5th and investors will be keeping a close eye on how this goes!
Last time we received a report on earnings from the Walt Disney Company the company was riding high in mid-February after the success of Disney+ and record-high consumer spending at the theme parks.
However, as the article in the Motley Fool points out, within weeks of the COVID-19 pandemic, the stocks for the company plummeted down 40% as Disney scrambled to close theme parks worldwide and other segments like Disney Cruise Line and ESPN were massively impacted.
Investors will be looking to the company next week to find out how far-reaching of an affect the social distancing measures have had on the company. With that in mind, there are a few key metrics to be on the lookout for:
Disney+ – Investors will look for the positive impact that Disney+ has had on the company. Thankfully the streaming service ramped up just as the pandemic was setting in. Other streaming services like Netflix were experiencing massive growth in April. Hopefully, Disney fared equally as well.
How bad was the impact on in-house entertainment? – Investors will be looking particularly at how bad the loses due to social distancing really was. The areas most impacted are those within in-house entertainment. This covers everything from the closures of cinemas nationwide to park and resort tickets, consumer products and cruise line.
Hulu- Another area is Hulu. How bad was the decline in advertising rates and what has the overall effect been on the company?
As Motley Fool tells us, the fiscal second quarter for Disney runs through the end of March meaning that it covers at least 2 weeks of social distancing closures. However, hopefully, the company will be able to include some figures for April in the report as well.
The Chapek Effect- Bob Chapek has only been CEO of the Walt Disney Company for a few weeks but now his role will be put to the test. Will he be able to calm investor worries about the financial future of the company? With new lines of credit opened, salary cuts and the furloughing of employees, how well can Disney weather the business challenges brought on by the pandemic?
Re-Opening- Investors will also want to know what’s next. Though it may be too early to announce a specific re-opening for the park, it will be important for Disney to outline the ways that they are preparing for months of a “potentially difficult operating environment” while laying the foundation for a successful recovery when consumers eventually feel comfortable travelling again.
One thing is for certain. It’s going to be an important week for Disney this week. Not only is the Earnings Report coming out for the fiscal quarter but also states like California and Florida are taking steps to outline their re-opening plans. Keep following along with MickeyBlog and we promise to keep you updated.
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Source: Motley Fool