Disney’s Mixed Bag: A Tale of Two Segments

Walt Disney Co. just dropped a mixed bag of financial results for its fiscal third quarter, and it’s time to separate the wheat from the chaff. On one hand, the company’s earnings per share (EPS) of $1.61 exceeded expectations by a healthy margin, crushing consensus estimates of $1.47. But on the other hand, revenue of $23.65 billion fell short of the $23.73 billion forecast, sending the stock price into a tailspin with a decline of around 2%.

But let’s not be too hasty in our judgment. Despite the revenue miss, the company’s overall performance was better than expected, with a 2% increase in revenue and a 4% increase in income before income taxes. It’s a small victory, but a victory nonetheless.

The real story here is the performance of Disney’s two main segments: streaming and traditional TV. The streaming segment showed strong performance, no doubt thanks to the continued growth of Disney+. But the traditional TV segment remains a challenge, a relic of a bygone era that’s struggling to keep up with the times.

Here are the key takeaways from Disney’s mixed bag of financial results:

• EPS of $1.61 exceeded expectations by 9.5%
• Revenue of $23.65 billion fell short of the $23.73 billion forecast by 0.2%
• The stock price declined by around 2%
• The streaming segment showed strong performance, with revenue growth of 10%
• The traditional TV segment remains a challenge, with revenue decline of 5%

It’s time for Disney to take a hard look at its traditional TV segment and figure out a way to turn it around. The company can’t rely on its streaming segment forever, and it needs to find a way to make its traditional TV business more competitive. The clock is ticking, and Disney needs to act fast.