Walt Disney To Report Q2 Earnings: What's In Store?

Walt Disney DIS is slated to report second-quarter fiscal 2018 results on May 8.

In the last reported quarter, the company delivered a positive earnings surprise of 16.67%. Revenues of $15.35 billion outpaced the Zacks Consensus Estimate of $15.24 billion and improved 4% year over year.

The Zacks Consensus Estimate for second-quarter earnings has declined by a penny to $1.68 per share over the last seven days, reflecting year-over-year growth of 12%. The consensus mark for revenues currently is pegged at $14.23 billion, reflecting year-over-year growth of 6.71%.

Let's see how things are shaping up for this announcement.

Parks & Resorts Continues to Attract Visitors

The media giant's continuing investment on Parks & Resorts (33.6% of third-quarter revenues) is reaping benefits. The company's strategy of better-load balancing of attendance throughout the year is driving up the number of visitor growth rate.

In the last reported quarter, attendance at domestic parks was up 6%. Moreover, per capita spending increased 7% on higher admissions, food and beverage, and merchandise spending. Additionally, room spending at Disney's domestic hotels was up 6% and occupancy was 91%.

At first-quarter conference call, management stated that domestic resort reservations for the second quarter were up 3% year over year, while booked rates rose 13%. The segment top-line is expected to benefit from the one-week of Easter holidays that fell in the last quarter.

Moreover, Disneyland Paris will continue to benefit from the resort's 25th anniversary celebration, which is likely to drive higher attendance, guest spending and hotel occupancy.

The Zacks Consensus Estimate for second-quarter Parks & Resorts revenues currently stands at $4.68 billion, reflecting almost 9% year-over-year growth.

Moreover, Disney estimated that the Easter Holiday timings would benefit Parks & Resorts operating income by almost $35 million, offset by roughly $20 million negative impact from a 14-day dry-dock of the Disney Magic.

The consensus mark for second-quarter Parks & Resorts operating income currently stands at $872 million, reflecting 16.3% year-over-year growth.

Black Panther to Boost Studio Top line

The stupendous success of Black Panther is likely to drive Studio (16.3% of third-quarter revenues) top-line growth in the second quarter.

According to data from Box office Mojo, the Chadwick Boseman starrer dominated the box office in February and March. Black Panther accounted for almost 23% of the first quarter's overall $2.85 billion in grosses.

Black Panther's domestic cumulative audience (cume) reached $647.8 million by the end of March. The movie has surpassed Titanic to become the third highest grossing domestic release of all-time.

Notably, Disney dominated March with five films grossing over $304 million collectively.

The Zacks Consensus Estimate for second-quarter Studio revenues currently stands at $2.17 billion, reflecting 6.7% year-over-year growth.

ESPN Woes to Continue

Falling subscriber base and higher programming costs at ESPN are major concerns. Fresh NBA agreement and increase in contractual rate for NFL programming has been driving the overall programming cost higher for ESPN.

However, ESPN aired two College Football Playoff semi-final bowl games in the last quarter, which is expected to boost ad revenues.

The Zacks Consensus Estimate for second-quarter Media Networks' revenues currently stands at $6.09 billion, reflecting 2.4% year-over-year growth.

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