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Disney: Investors await Bob Iger’s revival plan ahead of earnings call

Ahead of Disney's earnings call later today, investors eagerly await CEO Bob Iger's revival plan for the company, including Disney+ subscriber growth, subsidiary streaming platforms, and theme park revenue.

Video transcript

DAVE BRIGGS: So, Seana, let's get you up to speed now on what will be the market story of the day. The house of mouse reporting earnings after the bell, Bob Iger's first call since returning as CEO in late November. Among the many issues investors are eager to hear him address, the future for Hulu and ESPN, activist investor Nelson Peltz, "Avatar," and of course, streaming losses.

Seana, most of the questions we have can't be answered until that highly anticipated call, including what's the plan for licensing content to streaming competitors. As far as the report goes, I have a sneaking suspicion we could hear about layoffs.

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In a February 2 shareholder letter, Disney referenced its, quote, "cost reduction plan without offering specific details." Evercore ISI analyst Vijay Jayant wrote in a note, quote, "Cost cuts at a similar scale to the ones NBCUniversal is targeting in '23 could translate to $1.3 billion in savings over the next several years." A BOA note also referenced structural changes.

For context, Disney currently has 220,000 employees. That is 30,000 more than last year. Their last major cuts came in 2020. They were around that 30,000 mark. It just feels like one of those times-- there's been nothing on this, but he needs to have something big to assure investors, is it layoffs? We hope not. It feels like it could be the time.

SEANA SMITH: It certainly feels like it could be the time, especially given what we have seen so many other companies do during this earnings season-- announce layoffs, being forced to cut costs across their business. What I will be focusing on here is Disney+ subscriber growth, also just overall, their DTC business, direct-to-consumer business. We know that was a focal point of the last report when the company reported $1 and 1/2 billion in losses for this division, 4 billion for the year.

The Street remains pretty optimistic that those losses should become a bit narrow-- improve here over the coming quarter. Citi was one of those analysts out saying that he expects some improvement here from Disney going forward. In terms of total subscribers, we're looking at estimate of just around 164 million. Putting that in perspective, that would be essentially flat from what we heard last quarter from the company. But I think the losses there, really any momentum that they are seeing or lack thereof in their DTC business, that's going to be a huge point here for investors.

DAVE BRIGGS: Yeah, the subs are going to be a different story because of this major loss of the Premier cricket league in India, which cuts the number, but necessarily the revenue, because those are lower cost subscribers. As we move on to the call and you're hosting after the call with Brad and Allie Canal, what's your biggest question there? I really hope we get some clue about Hulu, but I actually don't think we're going to get it, unfortunately. I think investors all want to hear it. I don't think they will.

SEANA SMITH: Hulu, yeah, also just ESPN. I would be very, very surprised if Iger does comment on that. Clearly, there's been lots of speculation whether or not Disney should spin off ESPN. This is something that's been talked about now for years. It kind of moved away from that conversation most recently here, but you would think that it might come up on the call. If it does, I don't think-- I'm not too optimistic that Iger is going to answer it, though.

DAVE BRIGGS: I agree there, right? He's a sports fan. He's very close to Jimmy Pitaro. I don't think he wants to spin off ESPN.