1 00:00:02,520 --> 00:00:07,400 Speaker 1: Bloomberg Audio Studios, podcasts, radio news. 2 00:00:08,560 --> 00:00:12,480 Speaker 2: The Stock Movers Report, your roundup of companies making moves 3 00:00:12,480 --> 00:00:15,880 Speaker 2: in the stock market, harnessing the power of Bloomberg Data. 4 00:00:16,680 --> 00:00:18,079 Speaker 3: Let's take a look at some of the stocks on 5 00:00:18,120 --> 00:00:21,000 Speaker 3: the move. I'm Paul swinging alongside Isabelle Lee. One of 6 00:00:21,040 --> 00:00:23,240 Speaker 3: my companies I used to cover, the Walt Disney Company, 7 00:00:23,239 --> 00:00:26,200 Speaker 3: making Mouse. That reported some numbers, better than expected numbers, 8 00:00:26,320 --> 00:00:28,319 Speaker 3: so of course stocks them. So. The Walt Disney Company 9 00:00:28,400 --> 00:00:31,880 Speaker 3: reported better than expected third quarter earnings, with continued growth 10 00:00:31,880 --> 00:00:35,519 Speaker 3: at its parks and streaming business overshadowing a tough climate 11 00:00:35,520 --> 00:00:37,479 Speaker 3: for movies and traditional TV. Let's break it down with 12 00:00:37,520 --> 00:00:40,120 Speaker 3: Keitha Rung andough that she covers all the media stuff 13 00:00:40,159 --> 00:00:43,960 Speaker 3: for Bloomberg Intelligence. Githa's it seemed to me like, on 14 00:00:44,000 --> 00:00:47,159 Speaker 3: the surface, a pretty good quarter for Disney. What's the 15 00:00:47,159 --> 00:00:48,320 Speaker 3: street a little concerned about? 16 00:00:48,520 --> 00:00:52,760 Speaker 4: Yeah, really good quarter for Disney. Paul, the beaten raise 17 00:00:52,840 --> 00:00:55,360 Speaker 4: for sure, you know, expectations might have been, you know, 18 00:00:55,440 --> 00:00:58,320 Speaker 4: slightly high, and the fact that they didn't necessarily give 19 00:00:58,400 --> 00:01:02,240 Speaker 4: us any specific guide for fiscal twenty twenty six. They 20 00:01:02,320 --> 00:01:06,160 Speaker 4: did point to a raised guidance for EPs growth for 21 00:01:06,640 --> 00:01:09,639 Speaker 4: fiscal twenty twenty five eighteen percent now instead of sixteen percent. 22 00:01:10,200 --> 00:01:12,479 Speaker 4: But they didn't necessarily give us anything specific for fiscal 23 00:01:12,480 --> 00:01:15,959 Speaker 4: twenty twenty six. That could be a slight source of disappointment. 24 00:01:16,520 --> 00:01:18,600 Speaker 4: Other than that, the only other thing that I think 25 00:01:18,880 --> 00:01:21,479 Speaker 4: might be causing this reaction is that they did say 26 00:01:21,480 --> 00:01:25,280 Speaker 4: that they will stop disclosing Disney Plus subscriber numbers. But again, 27 00:01:25,400 --> 00:01:28,000 Speaker 4: this is not something totally unexpected. I mean, Netflix has 28 00:01:28,000 --> 00:01:30,840 Speaker 4: stopped doing this. We're seeing this kind of move away 29 00:01:30,840 --> 00:01:33,960 Speaker 4: from just subscriber numbers to a greater focus and profitability. 30 00:01:34,080 --> 00:01:36,119 Speaker 1: I want to zero in on parks because I'm still 31 00:01:36,120 --> 00:01:38,319 Speaker 1: scarred by how expensive it was when I visited a 32 00:01:38,319 --> 00:01:41,760 Speaker 1: couple of years ago as an adult. But how sustainable 33 00:01:41,840 --> 00:01:44,800 Speaker 1: is there strong parks performance given the divergent domestic and 34 00:01:44,840 --> 00:01:46,600 Speaker 1: international performance. 35 00:01:46,880 --> 00:01:50,520 Speaker 4: Very sustainable, Isabell. So you know, we saw domestic parks, 36 00:01:50,560 --> 00:01:52,880 Speaker 4: and I say that because you know, domestic parks actually 37 00:01:52,880 --> 00:01:55,480 Speaker 4: coming into this year, coming into this quarter, there were 38 00:01:55,480 --> 00:01:57,480 Speaker 4: a lot of worries, one of course, about the general 39 00:01:57,480 --> 00:02:00,240 Speaker 4: macroeconomic environment, but the bigger source of worry was really 40 00:02:00,280 --> 00:02:04,280 Speaker 4: the opening of Epic Universe, which is, you know, Universal's 41 00:02:04,320 --> 00:02:07,520 Speaker 4: big Florida Theme parket traction. But the fact that it 42 00:02:07,600 --> 00:02:12,320 Speaker 4: had absolutely no impact at all, or very very modest impact, 43 00:02:12,320 --> 00:02:15,480 Speaker 4: if at all, is really amazing, and it just kind 44 00:02:15,480 --> 00:02:18,560 Speaker 4: of speaks to the resilience in Disney's business model. They 45 00:02:18,600 --> 00:02:22,640 Speaker 4: reported again, very very strong per capita growth, you know, 46 00:02:22,680 --> 00:02:25,160 Speaker 4: in terms of food and beverages, in terms of concessions, 47 00:02:25,280 --> 00:02:27,160 Speaker 4: so all of that doing really well. And the reason 48 00:02:27,200 --> 00:02:29,880 Speaker 4: I'm so positive about this business going forward. First of all, 49 00:02:30,120 --> 00:02:32,720 Speaker 4: it contributes about fifty five to sixty percent of Disney's profits, 50 00:02:32,720 --> 00:02:34,720 Speaker 4: are really really important to their top line, to their 51 00:02:34,720 --> 00:02:38,280 Speaker 4: bottom line. Definitely, they have a lot of upcoming capacity, 52 00:02:38,400 --> 00:02:40,799 Speaker 4: So the biggest source of expansion over the next few 53 00:02:40,800 --> 00:02:43,119 Speaker 4: months is really going to be their cruise ships. They're 54 00:02:43,160 --> 00:02:47,520 Speaker 4: launching two new cruise ships, their biggest ever actually, which 55 00:02:47,560 --> 00:02:50,400 Speaker 4: is going to come on board in November and December. 56 00:02:51,000 --> 00:02:53,720 Speaker 4: One of them sets sail from Asia, and that basically 57 00:02:53,760 --> 00:02:56,359 Speaker 4: takes the number of cruise ships to eight cruise ships, 58 00:02:56,520 --> 00:02:59,720 Speaker 4: effectively kind of doubling their capacity in a span of 59 00:02:59,800 --> 00:03:02,320 Speaker 4: just two to three years. So that is going to 60 00:03:02,400 --> 00:03:05,919 Speaker 4: really buoy you know, both top line and bottom line 61 00:03:06,080 --> 00:03:08,680 Speaker 4: going into twenty twenty six. And then beyond that, you 62 00:03:08,760 --> 00:03:12,840 Speaker 4: really have this huge sixty billion capital expansion plan that 63 00:03:12,919 --> 00:03:14,799 Speaker 4: is really going to play out over the next five 64 00:03:14,840 --> 00:03:16,240 Speaker 4: to ten years. So we're going to see a lot 65 00:03:16,280 --> 00:03:18,799 Speaker 4: more attractions all over the world. We're going to see 66 00:03:18,800 --> 00:03:21,520 Speaker 4: that new Abu Dhabi park come out. So there is 67 00:03:21,639 --> 00:03:24,760 Speaker 4: really a lot of you know, a sustained momentum that 68 00:03:24,800 --> 00:03:26,520 Speaker 4: we can expect at the park's going forward. 69 00:03:26,919 --> 00:03:28,919 Speaker 3: Eitha talk to us about that deal they just made 70 00:03:28,960 --> 00:03:32,200 Speaker 3: with the NFL. It seems like a really positive development 71 00:03:32,240 --> 00:03:32,760 Speaker 3: for the company. 72 00:03:32,960 --> 00:03:36,160 Speaker 4: Yeah, it's really good. I think from a Disney from 73 00:03:36,160 --> 00:03:39,240 Speaker 4: an ESPN standpoint that they're so closely aligned now with 74 00:03:39,400 --> 00:03:43,160 Speaker 4: the NFL. I mean, the NFL is absolutely the premium property, 75 00:03:43,160 --> 00:03:45,080 Speaker 4: the gold standard, Paul. You know this well when it 76 00:03:45,080 --> 00:03:47,440 Speaker 4: comes to you know, sports properties in the in the US. 77 00:03:47,480 --> 00:03:49,120 Speaker 4: And the fact now that they're going to be able 78 00:03:49,160 --> 00:03:52,760 Speaker 4: to use all of this content for their upcoming ESPN 79 00:03:52,880 --> 00:03:56,040 Speaker 4: streaming launch, I mean that itself just kind of give 80 00:03:56,400 --> 00:03:59,520 Speaker 4: gives it a tremendous boost, I think even before you 81 00:03:59,600 --> 00:04:03,400 Speaker 4: know it come on board. So it's great for the product. 82 00:04:03,560 --> 00:04:06,600 Speaker 4: It's also great from a strategic standpoint because the NFL 83 00:04:06,640 --> 00:04:09,600 Speaker 4: is obviously one of the most important sports properties, and 84 00:04:09,640 --> 00:04:12,400 Speaker 4: this really gives them access or it at least definitely 85 00:04:12,480 --> 00:04:15,120 Speaker 4: gives them a little bit of an advantageous position compared 86 00:04:15,120 --> 00:04:17,080 Speaker 4: to let's say, an Amazon or a Netflix or an 87 00:04:17,080 --> 00:04:19,520 Speaker 4: Apple if they want to ever outbid you know, the 88 00:04:19,560 --> 00:04:23,800 Speaker 4: current media partners. So definitely, I think a strategically, very 89 00:04:23,839 --> 00:04:25,640 Speaker 4: very sound move on the part of Disney. 90 00:04:25,880 --> 00:04:27,799 Speaker 1: So it seems like we had a good quarter. Runway 91 00:04:27,800 --> 00:04:30,800 Speaker 1: for growth is really just long and wide. What downside 92 00:04:30,839 --> 00:04:34,640 Speaker 1: risks remain then, especially around the macro uncertainty and tiriff exposure. 93 00:04:34,800 --> 00:04:37,919 Speaker 4: Do you see, Yeah, maybe a little bit of execution risks. 94 00:04:37,920 --> 00:04:39,919 Speaker 4: So we still really don't know how this whole. I mean, 95 00:04:40,120 --> 00:04:43,599 Speaker 4: obviously everybody is very excited for the ESPN product launch, 96 00:04:44,080 --> 00:04:45,960 Speaker 4: but we still don't know how exactly that's going to 97 00:04:46,000 --> 00:04:48,320 Speaker 4: play out. Again, a huge source of upside is going 98 00:04:48,320 --> 00:04:51,640 Speaker 4: to be the streaming business. Everybody's expecting huge cost savings 99 00:04:51,680 --> 00:04:54,160 Speaker 4: when it comes to the integration of Hulu and Disney Plus. 100 00:04:54,400 --> 00:04:56,320 Speaker 4: But again, execution is a little bit of a risk. 101 00:04:56,360 --> 00:04:59,640 Speaker 4: And then you pointed out you know macro factors. Remember, 102 00:04:59,680 --> 00:05:02,880 Speaker 4: Disney still obviously has huge exposure because of its parks 103 00:05:02,920 --> 00:05:05,360 Speaker 4: business and anytime we see kind of a slowdown in 104 00:05:05,400 --> 00:05:07,839 Speaker 4: the economy. We do feel that in the parks as well. 105 00:05:08,279 --> 00:05:11,360 Speaker 4: And of course advertising also, so you know, they do 106 00:05:11,440 --> 00:05:14,120 Speaker 4: have a substantial exposure to advertising because of their TV 107 00:05:14,200 --> 00:05:16,760 Speaker 4: network's business. So there again we can see a little 108 00:05:16,760 --> 00:05:19,720 Speaker 4: bit of an impact. But overall, as it stands right now, 109 00:05:19,720 --> 00:05:21,480 Speaker 4: the business seems to be in really good shape all 110 00:05:21,560 --> 00:05:22,159 Speaker 4: right here. 111 00:05:22,000 --> 00:05:24,800 Speaker 3: The problem childs though, are the broadcast networks and the 112 00:05:24,839 --> 00:05:27,640 Speaker 3: cable networks. What you know, just because of cord cutting, 113 00:05:27,680 --> 00:05:30,720 Speaker 3: that they're just declining businesses. What's the company saying that, 114 00:05:30,839 --> 00:05:32,359 Speaker 3: what we're going to do with those businesses. 115 00:05:32,760 --> 00:05:35,760 Speaker 4: They haven't said anything explicitly, Paul. So a few years ago, 116 00:05:35,880 --> 00:05:38,200 Speaker 4: you know, this idea was floated that maybe they kind 117 00:05:38,200 --> 00:05:41,280 Speaker 4: of spin off ABC, their broadcast network, maybe they spin 118 00:05:41,320 --> 00:05:45,000 Speaker 4: off their linear cable channels, all of that. You know, 119 00:05:45,400 --> 00:05:48,920 Speaker 4: noise is kind of quietened down. You know. Barbiger basically said, no, no, no, 120 00:05:48,960 --> 00:05:51,280 Speaker 4: we need these businesses. They're all kind of integral to 121 00:05:51,320 --> 00:05:54,800 Speaker 4: the whole Disney story. So we haven't heard anything recently 122 00:05:55,400 --> 00:05:58,799 Speaker 4: that being said. Just this whole deal with the NFL 123 00:05:59,040 --> 00:06:01,600 Speaker 4: and the NFL kind of day an equity stake. It 124 00:06:01,640 --> 00:06:05,280 Speaker 4: almost seems like they are prepping for ESPN to kind 125 00:06:05,320 --> 00:06:08,800 Speaker 4: of ESPN and maybe ABC to kind of coast solo. Remember, 126 00:06:08,839 --> 00:06:11,960 Speaker 4: Bob Eiger only has a few more months left, so 127 00:06:12,120 --> 00:06:16,480 Speaker 4: the end of twenty twenty six he leaves Disney, or 128 00:06:16,520 --> 00:06:20,320 Speaker 4: at least that's what he says. Yeah, we think, and 129 00:06:20,360 --> 00:06:23,360 Speaker 4: I really think he kind of wants to get this 130 00:06:23,440 --> 00:06:26,240 Speaker 4: deal done so to separate ESPN because it's not really 131 00:06:26,960 --> 00:06:30,080 Speaker 4: core to the rest of the Disney properties. But again 132 00:06:30,120 --> 00:06:31,520 Speaker 4: it's a little bit of a wait and watch, but 133 00:06:31,560 --> 00:06:34,800 Speaker 4: nothing explicitly, you know, stated from Disney management about what 134 00:06:34,800 --> 00:06:36,800 Speaker 4: they want to do with the linear piece of the business. 135 00:06:37,040 --> 00:06:39,360 Speaker 1: So ESPN is getting a fresh spin with an August 136 00:06:39,400 --> 00:06:42,320 Speaker 1: twenty one launch. It will be thirty dollars a month 137 00:06:42,400 --> 00:06:44,640 Speaker 1: for the new streaming up. What do you make of 138 00:06:44,680 --> 00:06:46,800 Speaker 1: that price you think people will pay up for it? 139 00:06:46,920 --> 00:06:47,680 Speaker 1: Or is that steep? 140 00:06:48,000 --> 00:06:50,080 Speaker 4: It's a high price point, There's no doubt about it. 141 00:06:50,120 --> 00:06:52,040 Speaker 4: I think most people were kind of expecting somewhere in 142 00:06:52,080 --> 00:06:54,960 Speaker 4: the twenty three to twenty five dollars range. That said, 143 00:06:55,000 --> 00:06:57,640 Speaker 4: what you know, we just ran a survey actually at 144 00:06:57,640 --> 00:07:00,479 Speaker 4: Bloomberg Intelligence, and what we found is that there's actually 145 00:07:00,560 --> 00:07:03,000 Speaker 4: a lot of interest in this product, so we think 146 00:07:03,000 --> 00:07:05,119 Speaker 4: that the update will be fairly strong, and the update 147 00:07:05,240 --> 00:07:07,520 Speaker 4: not so much as a standalone product, but when you 148 00:07:07,600 --> 00:07:10,800 Speaker 4: bundle it with Disney Plus and Hulu, so they are 149 00:07:10,920 --> 00:07:14,240 Speaker 4: running a pretty attractive promotion. So for the first year, 150 00:07:14,280 --> 00:07:18,480 Speaker 4: you can get Disney Plus, Hulu and ESPN at a 151 00:07:18,520 --> 00:07:20,840 Speaker 4: thirty to thirty dollars price point, which which seems like 152 00:07:20,880 --> 00:07:22,640 Speaker 4: really good value. So I think we're going to see 153 00:07:22,640 --> 00:07:25,760 Speaker 4: a lot of people come in initially through the bundles 154 00:07:25,800 --> 00:07:26,240 Speaker 4: at least. 155 00:07:26,280 --> 00:07:28,480 Speaker 3: All right, great stuff as always, Keitha, thank you so 156 00:07:28,560 --> 00:07:31,840 Speaker 3: much for chatting with Uskeitha Ranganath, and she's the media analyst. 157 00:07:31,960 --> 00:07:35,200 Speaker 3: The media anamals the Bloomberg Intelligence covering all those fun 158 00:07:35,240 --> 00:07:38,119 Speaker 3: companies in the media space. And Disney again, pretty good quarter, 159 00:07:38,160 --> 00:07:41,360 Speaker 3: maybe not quite up to expectations at mickey Mouse. 160 00:07:42,720 --> 00:07:46,720 Speaker 2: The Stock Movers Report from Bloomberg Radio. Check back with 161 00:07:46,800 --> 00:07:49,400 Speaker 2: us throughout the day for the latest roundup of companies 162 00:07:49,440 --> 00:07:52,560 Speaker 2: making news on Wall Street and for the latest market 163 00:07:52,600 --> 00:07:57,080 Speaker 2: moving headlines. Listen to Bloomberg Radio Live, catch us on YouTube, 164 00:07:57,160 --> 00:08:00,640 Speaker 2: Bloomberg dot com, and on Applecarplay, and write auto with 165 00:08:00,720 --> 00:08:06,920 Speaker 2: the Bloomberg Business app. MM hmm.