Here's what to expect when Disney reports earnings before the bell

Disney is poised to report fiscal Q4 earnings, with analysts expecting $1.05 EPS and $22.75 billion in revenue, as investors focus on its media business. This report will be the last to include subscriber numbers and ARPU for Disney+, Hulu, and ESPN+, aligning with Netflix's reporting strategy. Streaming performance will be scrutinized for the impact of recent price hikes and a brief 'Jimmy Kimmel Live!' suspension on subscriber figures, while traditional TV networks are anticipated to show continued declines in ad revenue and operating income, reflecting broader industry cord-cutting trends.

Analysis

Disney (DIS) is scheduled to report its fiscal Q4 earnings, with LSEG analysts projecting $1.05 in EPS and $22.75 billion in revenue. This report will be notable as it marks the final instance the company will disclose subscriber numbers and Average Revenue Per Unit (ARPU) for its streaming services, including Disney+, Hulu, and ESPN+, a strategic shift mirroring Netflix's (NFLX) reporting approach. Previously, Disney+ reported approximately 128 million subscribers, and Hulu 55.5 million.

Investor attention will be acutely focused on the streaming segment's performance, particularly how recent events have influenced subscriber metrics and ARPU. Key factors include the October price hikes across Disney's streaming offerings and the temporary suspension of "Jimmy Kimmel Live!" in September, which media outlets reported led to a subscriber exodus. The August launch of the ESPN direct-to-consumer app also adds a new element to the streaming narrative.

Concurrently, the traditional TV networks, encompassing ABC and cable channels like ESPN and FX, are expected to face continued pressure. Peers such as Warner Bros. Discovery (WBD) have recently reported declines in TV network advertising revenue and operating income, reflecting a broader industry trend of cord-cutting. Disney itself has previously indicated declining operating income and ad revenue for its linear networks, underscoring persistent challenges in this segment.

Key Decisions for Investors

• Investors should recalibrate valuation models to account for the cessation of detailed streaming subscriber and ARPU data, shifting focus to broader financial metrics like overall revenue and profitability.
• Closely monitor Disney's Q4 streaming subscriber figures and ARPU for signs of resilience or further erosion following recent price hikes and content controversies, especially given the moderately negative sentiment surrounding DIS.
• Evaluate the performance of traditional linear networks for further declines in operating income and advertising revenue, as this segment continues to face structural challenges evident across the media industry.