Netflix, Comcast, Amazon to Disclose Earnings Next Week: How to Watch
The upcoming earnings season for media and tech companies is expected to be defined by a bruising proxy battle, a complicated probable sale, and an industry-wide hunt for profits amid a much more demanding market.
Netflix, which is set to report its earnings after the market closes on Thursday, has seen its share price vault 28% year to date, as it generated billions in free cash flow and added millions of subscribers since an ugly earnings announcement in 2022. The company has made a number of changes in response to the backlash, including launching an ad-supported tier and cracking down on password sharing. These changes have helped to drive subscriber growth and improve monetization in its most important market.
Comcast and Amazon, which are scheduled to release their earnings next week, respectively, are expected to receive a boost in ad revenues from the presidential elections and the Olympics in Paris, which its subsidiaries and streaming service will be carrying wall-to-wall. However, Comcast's core business of providing wired broadband and cable access is facing tough competition from mobile companies' fixed wireless services, which have grown from 1% to 7% in two years. Amazon's Prime Video unit is a small but highly visible part of the company, but it will be closely watched for progress with its recent default conversion of tens of millions of subscribers into an ad-supported tier.
The next earnings to watch out for are Paramount's on April 29, Fox's on May 14, and Warner Bros. Discovery's on May 9. Disney, which recently won a bruising proxy battle with two activist investors, is expected to report its earnings in May as well. The company's successful strategic positioning for a direct-to-consumer future is paying off, with 40% of the company's media revenues now coming through direct-to-consumer operations. However, the company has also faced challenges, including a bruising proxy battle, a $60 billion expansion of parks and resorts, and a $1.5 billion investment into Epic Games with a Disney-focused Fortnite expansion.
Despite these challenges, Iger's moves have helped to drive subscriber growth and improve monetization in Disney's direct-to-consumer business. Fox has continued to focus on its linear broadcast and cable operations, along with the free, ad-supported Tubi service. However, the company's growth prospects are uncertain. WBD, which reports on May 9, continues to walk a tightrope between its crushing load of $40 billion in outstanding debt and an opportunity to use free cash flow from rampant spending cuts, shutdowns, and sell-offs to drive shareholder value. The company has managed to annoy Hollywood creatives with a series of blunt cost-cutting moves while consistently missing rosy financial predictions.
Despite these issues, Zaslav is free to buy something now that prohibitions against dealmaking in the Reverse Morris Trust used to create WBD have expired. However, expectations have cooled for such a deal.