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Will ESPN Hurt Disney's Q4 Earnings?

As we near the end of the third-quarter earnings season, many investors are ready to look ahead to the fourth quarter and start working out how companies might perform for the full year. Yet there are still titans, such as the Walt Disney Company DIS, left to report.

Investors and other industry heavyweights will be anxiously awaiting Disney’s results, with the company’s fiscal fourth-quarter earnings due after the closing bell on Thursday. The nervous energy surrounding the once-invincible entertainment giant comes at a time when consumer habits are changing rapidly.

With that said, Disney’s fourth-quarter earnings are expected to gain 1.82%, based on our latest Zacks Consensus Estimates. Furthermore, the company’s revenues are projected to inch up 0.05%.

However, shares of Disney are down almost 3% so far this year as major business segments, such as its sports entertainment leg ESPN, lose steam. Disney’s networks have been hit hard by cord-cutters and streaming giants like Netflix NFLX, and these challenges have weighed down the stock recently.

Now, ahead of its Q4 earnings report, it might be more important than ever for investors to dive deeper into Disney’s different business units in order to gain a more complete understanding of the company.

This is where our exclusive non-financial metrics consensus estimate file can come in handy. These key stock-driving estimates are updated daily and are based on the independent research of expert stock analysts. For more information on the NFM file, click here.

Many investors and analysts might want to look at Disney’s Media Networks division, which includes ESPN and ABC, to help understand how the most fragile part of its business—linear TV—is set to perform.

Disney’s media arm is projected to post revenues of $5.706 billion, which would mark only a 0.85% year-over-year jump. Making matters worse is the fact that operating income for it Media Networks division is expected to dip nearly 4.50% to hit $1.672 billion.

Disney’s Cable Networks revenue is set to experience a 1.34% gain to reach just over $4 billion, which, on its face, might ease some investors’ nerves about ESPN’s woes. But operating income for the Cable Networks division is expected to sink 8.50%.

On top of that, Disney’s Broadcasting revenue is projected to gain a meager 0.12% to reach $1.704 billion. The segment is also expected to see its operating income slip 2.68%.

For more stock-moving estimates ahead of Disney’s Q4 report, check out our full guide: What To Expect From Disney's Q4 Earnings Report.

And make sure to check back here for our full analysis of Disney’s actual results later this week!

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