Yahoo Finance

Disney set to report second quarter results and give investors the latest insight on how the company is thinking of macro uncertainties and Yahoo Finances Alexander Canal joins us now with more. Allie.

Hi, Josh. Yeah, Disney earnings finally here. And as usual, investors are going to be focused on two big themes, one being the health of the parks and the profit improvements within streaming. But let's start with parks because historically, this has been a very reliable profit engine for Disney, but we have had a bumpy few quarters due to weather disruptions, cruise ship expenses, and now we have a consumer that's potentially pulling back and spending less on travel. So any further color on the health of the consumer, the macro environment, that's going to be closely watched along with competition. We have NBC Universal's Epic Universe debuting in Orlando later this month. That's been looked at as a big challenger to Disney. So what market share could look like post epic will also be on the minds of investors. And then quickly turning to the streaming side, the company's direct to consumer unit, which includes Disney Plus and Hulu, that turned a profit again last quarter. It was boosted by price hikes and a crackdown on password sharing. Those efforts will likely continue to boost revenue in the second quarter, but Disney Plus is expected to lose some subscribers due to those higher prices along with some disruption changes out in France. Overall, Disney still says it's on track for earnings growth this year in the mid to high single digits, but the stock is down sharply in 2025. Investors will be looking for more concrete signs of a turnaround here moving forward. We have shares down about 17% since the start of the year.

I'm just going to be really interested, Allie, how execs walk analysts, the street, and investors through how they're just thinking about navigating an economic doubt because you just laid out their parks and streaming and ad revenue. That is a That's a lot of exposure. Though I guess maybe to your point, you could say that the the stocks are already down nearly 20% this year, so how much the bad news is priced in?

Yeah, that is a question. I know in the last earnings call, Hugh Johnston, he's the CFO of Disney, he basically said it's very hard to change their guidance at this point. So they really reiterated everything that we heard from the end of last year. And this guidance, this forecast was very strong, and they basically said, you know, full steam ahead. We're fine. We're We're doing well at this point, and they do expect a lot of acceleration in the back half of this year. But that's a big question mark, right? Because a lot of economists out there have been saying we could see pain on the labor side, pain on the inflation side in mid to late summer. So if that happens, the back half of the year for Disney, it's not going to go so well. So I'm curious to see if management has a change in tone because we didn't really see that in February. They were pretty confident, but clearly since then there's been a lot that's happened even last month alone. So I I agree with you. That's one thing I'm watching.