Netflix Inc. stock jumped last month after it reported big subscriber gains and raised prices. Paramount Global’s results beat expectations last week, sending shares of the streaming and entertainment giant on their best gains in nearly a year, and Roku Inc. also offered optimistic predictions.
As Walt Disney Co., Warner Bros. As Discovery Inc., Lions Gate Entertainment Corp., and AMC Entertainment Holdings Inc. report results, we’ll learn whether the entertainment industry is making investors happy again, even if viewers aren’t.
They will report as the streaming industry consolidates under investor pressure to turn a better profit and platforms charge more to watch and cram in more advertisements.
As streaming becomes more prevalent, cable TV providers and movie theaters are also looking for solutions. Despite Hollywood’s writers’ return to work following a strike that shut down production, its actors are still on strike over AI usage to portray actors, streaming payments, and other issues.
During Disney’s earnings report on Wednesday, there will be questions about losses at Disney+, its plan to take over the streaming platform Hulu and speculation over which of its large media properties might be sold, efforts to cut billions of dollars in costs, and efforts to stamp out streaming-account sharing. ESPN, which Disney has been relying on for years, is estimated to be worth $24 billion by BofA analysts. Meanwhile, activist investor Nelson Peltz has been angling for seats on Disney’s board, and its battle with Florida Gov. Ron DeSantis continues.
Meanwhile, Warner Bros. This is the day that Discovery — the parent company of Max streaming service, Warner Bros. Studios, Discovery Channel, CNN, and other channels — reports on Wednesday, as it tries to turn its intellectual property assets into franchise movies. AMC, a meme-stock theater chain, also reports Wednesday after Cinemark Holdings Inc. reported positive results.
While both “Barbie” and “Oppenheimer” were original films, analysts predict sequels and remakes will continue to saturate theater chains in coming months.
Ultimately, the pressure to boost profits will affect what TV shows and films are made, and what viewers actually watch. According to a FactSet report on Friday, investors have been less kind to companies whose results have missed Wall Street’s expectations.
According to that report, stocks of companies whose earnings missed expectations have dropped by an average of 5.2% in the two days before and two days after publication during the third-quarter earnings season. Assuming that figure holds, it would be the biggest negative reaction to an earnings miss since the second quarter of 2011.
Earnings for this week
In the coming week, 55 S&P 500 companies will report quarterly results, including one from the Dow.
There are concerns about EV demand at Rivian Automotive Inc. Madison Square Garden Entertainment Corp.’s results will shed more light on people’s appetite for live entertainment following Live Nation Entertainment Inc.’s blowout quarterly results last week. Digital marketing platform Klaviyo Inc. and fast-casual chain Cava Group Inc. – both recent IPOS – will provide a deeper look at digital advertising budgets and a competitive restaurant environment, respectively.
During the week, The New York Times Co. also reports. Planet Fitness Inc., eBay Inc., and Take-Two Interactive Software Inc.
Put this call on your calendar
Security drama: Cyberattacks are becoming more severe, and customers are feeling the effects more acutely. Against that backdrop, MGM Resorts International will report quarterly results on Wednesday, following a cyberattack that knocked out some of its systems. Approximately $100 million would be spent on the attack, which MGM disclosed in September.
According to the company, most of the impact of that attack – which disrupted hotel bookings and forced hotels to operate manually – was contained to September. Last week, the SEC accused SolarWinds Corp. of not disclosing its purported cybersecurity vulnerabilities, potentially leaving other companies concerned about their own vulnerability.