Last month, Netflix Inc. NFLX,
shares jumped after it reported big subscriber gains and raised prices. Last week results from Paramount Global PARA,
beat expectations, helping the streaming and entertainment giant’s shares post their best percentage gain in nearly a year, and Roku Inc. ROKU,
also offered an optimistic outlook.
This week – as Walt Disney Co., Warner Bros. Discovery Inc., Lions Gate Entertainment Corp. and AMC Entertainment Holdings Inc. all report results – we get a deeper insight into whether the entertainment industry is starting to make investors happy again, even if they make viewers less happy in the process.
These companies will report as the streaming industry, under pressure from investors to make better profits, consolidates and as platforms charge more to watch and cram more ads into shows and movies.
Cable TV providers and movie theaters are also trying to find a way forward as streaming becomes more common. Even as Hollywood writers return to work after a strike that halted production, the actors are still notable, with issues surrounding the use of AI to portray actors, streaming payments and other balance sheet issues.
Disney DIS,
which reports earnings Wednesday is facing questions about losses at Disney+, efforts to cut billions in costs and eradicate streaming account sharing, its planned acquisition of streaming platform Hulu and speculation about which of its major media properties it might sell. BofA analysts recently estimated that ESPN, which Disney has leaned on for years, could be worth about $24 billion. Meanwhile, activist investor Nelson Peltz is seeking seats on Disney’s board, and the battle with Florida Governor Ron DeSantis continues.
Elsewhere, Warner Bros. Discovery WBD,
– the parent company of the streaming service Max, Warner Bros. Pictures, Discovery Channel, CNN and other networks – reported Wednesday as it tries to parlay its reserves of intellectual property into franchise films. Meme stock theater chain AMC AMC,
which also reports Wednesday, following positive results from rival Cinemark Holdings Inc. C.N.K.,
Sales at the theater chains have increased in recent months due to ‘Barbie’ and ‘Oppenheimer’. Although both were original films, analysts say the avalanche of sequels and remakes hitting theaters is unlikely to stop.
The pressure to increase profits will ultimately influence what TV shows and movies are made and what viewers actually consume. And a report from FactSet on Friday found that investors have been more unfriendly than usual toward companies whose results have fallen short of Wall Street expectations.
That report shows that companies whose earnings did not exceed expectations during the third quarter saw an average share price decline of 5.2% during the two days before the publication of results and the two days after. If that figure holds, it would be the stock market’s biggest negative reaction to an earnings beat since the second quarter of 2011.
In profit this week
Of the S&P 500 companies, 55, including one from the Dow Jones, will report quarterly results in the coming week.
EV startup Rivian Automotive Inc. RIVN,
reports amid concerns about demand for electric vehicles. Following Ticketmaster parent company Live Nation Entertainment Inc.’s LYV.
Last week’s quarterly earnings blowout, Madison Square Garden Entertainment Corp. results. MSGE,
will shed more light on people’s need for live entertainment. Results from digital marketing platform Klaviyo Inc. KVYO,
and fast-casual chain Cava Group Inc. CAVA,
– both recent IPOS – will offer a deeper look at digital advertising budgets and a competitive restaurant background respectively.
The New York Times Co. NYT,
also reports during the week. This also applies to Planet Fitness Inc. PLNT,
Gilead Sciences GILD,
eBay Inc. eBay,
and Take-Two Interactive Software TTWO,
The call to put in your agenda
Cyber Security Drama: Cyber attacks are becoming more and more intense and customers are starting to feel their consequences more acutely. Against that backdrop, casino and resort operator MGM Resorts International MGM,
is set to report quarterly results on Wednesday, in the wake of a cyberattack that shut down some of its systems. MGM has said the attack, which the company announced in September, would cost them about $100 million.
The company said the fallout from that attack — which disrupted hotel bookings and forced hotels to manually service, resulting in long lines — was largely contained to September. But the SEC last week charged software company SolarWinds Corp. SWI of it:
of not disclosing the alleged cybersecurity vulnerabilities, which may leave other companies wondering if they are vulnerable to similar legal action.
The numbers to watch
The gig economy and delivery demand: Rival ride-hailing platforms Uber Technologies Inc. and Lyft Inc. report results on Tuesday and Wednesday respectively. Maplebear Inc. SHOPPING CART,
better known as the grocery delivery platform Instacart, also reported on Wednesday.
Analysts have been friendlier to Uber UBER,
the larger of the two taxi companies. But Lyft has tried to lower its prices and roll out new services, including one that tries to match women and non-binary riders and drivers. All three companies’ financials will land following strong results from food delivery platform DoorDash Inc. DASH,
which has expanded its services to retail in an effort to compete with Instacart and other delivery providers. And they will fill in the picture of rider demand following the back-to-school season and a greater push to get workers back into the office.
In addition to ride-sharing, Uber and Instacart’s results will narrow the window on demand for delivery services, as some analysts wonder whether higher prices for basic necessities and student loan payments may make food delivery more redundant. Analysts also seem likely to focus on these companies’ high-margin digital advertising businesses, as more e-commerce platforms look to convert their apps and websites into online billboard space.