Disney is slated to report first-quarter earnings after the close Tuesday, as its blockbuster deal with Twenty-First Century Fox looms over the rest of the entertainment industry.
Here is what Wall Street expects:
- EPS: $1.61, according to Thomson Reuters
- Revenue: $15.46 billion, according to Thomson Reuters
In December, Disney announced a $66.1 billion deal, including debt, to acquire many parts of Fox. The boards of both companies asked longtime CEO Bob Iger to stay on through the end of 2021. Fox CEO James Murdoch will help with the transition.
Still, the proposed acquisition of Fox properties will have to pass federal anti-trust laws. Investors will likely keep an eye on developments out of the Department of Justice’s lawsuit against the proposed AT&T-Time Warner merger. AT&T is slated to make its case for the deal on March 19.
The Disney-Fox deal comes as tech giants like Netflix and Amazon engage traditional medias in an increasingly competitive spending race on content. CNBC reported Monday that fear of being outspent was one of the main reasons Rupert Murdoch decided to sell those Fox assets. Last month, Netflix said it plans on spending about $7.5 billion to $8 billion on content in 2018.
Exclusive and original content help media companies market their direct-to-consumer offerings. Disney’s proposed acquisition of Fox assets would broaden the company’s content portfolio, making it more competitive.
When Disney announced that it plans on launching a stand-alone streaming service in 2019, the company said it would also be pulling its movies from Netflix. In November, Disney said it plans to price its service “substantially below” that of Netflix, in part because it would initially have a smaller library than what the streaming giant offers.
Fox is slated to report earnings after the market close on Wednesday.
This is breaking news. Please check back for updates.
Programming note: Disney Chairman and CEO Bob Iger is slated to appear in an exclusive interview on CNBC’s “Closing Bell” at 4 p.m. ET.
