What You Need To Know Ahead of Disney's Earnings Report

Key Takeaways

• Disney will report third-quarter earnings before Wednesday's opening bell.
• Analysts expect Disney to swing to a profit, after the company reported a loss in the prior quarter and year-ago period.
• Investors will likely be watching for strength in the company's experiences segment, driven by its parks and cruises.
• The company will also provide updates on its streaming business after securing NBA rights.

Disney (DIS) is set to report third-quarter earnings before the opening bell Wednesday, with investors likely to be watching for strength in its experiences segment and updates on its streaming business.

The company's revenue is expected to grow to $23.02 billion, according to estimates compiled by Visible Alpha. Net income is projected to come in at $1.83 billion or $1 per share, after the company reported a loss of $460 million or 25 cents per share a year ago.

Key Metric: Experiences Revenue

In the second quarter, Disney said revenue from its experiences segment surged, driven by growth from its parks and cruises.

Disney CEO Bog Iger said the company sees "lots of opportunities to continue to grow attendance, both domestically and internationally," especially in its cruise business. Disney recently announced it is launching a Tokyo-based cruise ship.

Analysts expect experiences revenue to come in at $8.59 billion, per consensus estimates, which would represent nearly 5% growth from the year-ago period.

Business Spotlight: Streaming Outlook After NBA Win

Disney has invested heavily in its streaming segment, with the company reporting a surprise profit in the second quarter in its direct-to-consumer entertainment segment, which consists of Disney+ and Hulu.

The company, alongside its streaming competitors, has bet on sports through its ESPN partnership. ESPN recently secured NBA rights which could help Disney support its streaming business.

Recent movie releases, like "Inside Out 2" and "Deadpool & Wolverine," could also prop up its streaming segment as the titles make their way to Disney+.

Disney shares have lost close to 1% so far this year, at $89.57 as of Friday's close.

Read the original article on Investopedia.