Yahoo Finance Disney Surges on Fiscal Q1 Earnings Beat: 5 ETFs to Stream
The Walt Disney Company DIS reported robust first-quarter 2023 results after the closing bell on Wednesday, wherein it beat estimates for both earnings and revenues. However, the company posted subscriber losses in Disney+ streaming services for the first time since launching in late 2020.
Given the earnings beat, shares of Disney rose 6.6% in pre-market trading today at the time of writing. This has put ETFs with the largest allocation to this global media and entertainment company in focus for the days ahead. These funds include Invesco NASDAQ Internet ETF PNQI, Fidelity MSCI Communication Services Index ETF FCOM, Invesco Dynamic Media ETF PBS, Vanguard Communication Services ETF VOX and Communication Services Select Sector SPDR Fund XLC.
Earnings in Detail
The company reported earnings per share of 99 cents, topping the Zacks Consensus Estimate of 30 cents but decreasing from the year-ago earnings of $1.06. Revenues climbed 8% year over year to $23.5 billion and edged past the Zacks Consensus Estimate of $23.3 billion (read: 5 Sector ETFs to Play on Upbeat Q4 Revenue Growth).
Disney lost 2.4 million new subscribers during the quarter, with the Disney+ user base declining 1% year over year to 161.8 million subscribers. The entertainment giant posted the first decline in subscribers to its Disney+ streaming service following the return of CEO Bog Iger to the helm of the media and entertainment group late last year. The subscriber loss comes on the heels of the company increasing the subscription price of its Disney+ ad-free plan to $11 per month in tandem with its new $7.99 ad-supported tier.
Meanwhile, Hulu had 48 million subscribers, up 2% year over year, and ESPN+ had 24.9 million users, up 2% year over year.
ETFs in Focus
Invesco NASDAQ Internet ETF (PNQI)
Invesco NASDAQ Internet ETF follows the Nasdaq CTA Internet Index, which measures the performance of companies engaged in Internet-related businesses listed on the New York Stock Exchange, NYSE American, Cboe Exchange or The Nasdaq Stock Market. The product holds 81 stocks in its basket, with Disney occupying the second position with 7.8% of assets.
Invesco NASDAQ Internet ETF has amassed $532.6 million in its asset base and charges 60 bps in fees per year. The fund trades in a light volume of 23,000 shares and has a Zacks ETF Rank #1 (Strong Buy) with a High risk outlook (read: 5 Top-Ranked ETFs Beating the Market at Midway Q1).
Fidelity MSCI Communication Services Index ETF (FCOM)
Fidelity MSCI Communication Services Index ETF follows the MSCI USA IMI Communication Services 25/50 Index. It holds 113 stocks in its basket, with Disney occupying the fourth position at 6.7%.
Fidelity MSCI Communication Services Index ETF has amassed $540.6 million in its asset base and trades in an average daily volume of 128,000 shares. It charges 8 bps in annual fees and has a Zacks ETF Rank #2 (Buy) with a Medium risk outlook.
Invesco Dynamic Media ETF (PBS)
Invesco Dynamic Media ETF provides exposure to companies engaged in the development, production, sale and distribution of goods or services used in the media industry by tracking the Dynamic Media Intellidex Index. It holds 31 stocks in the basket, with Disney taking the third position with a 5.3% allocation (read: ETFs to Click on Netflix's Blowout Q4 Subscriber Growth).
Invesco Dynamic Media ETF has been able to manage $38.1 million in its asset base while seeing a lower volume of about 17,000 shares a day. It has 0.63% in expense ratio and a Zacks ETF Rank #3 (Hold) with a Medium risk outlook.
Vanguard Communication Services ETF (VOX)
Vanguard Communication Services ETF also targets the communication sector by tracking the MSCI US Investable Market Communication Services 25/50 Index. Holding 113 stocks in its basket, Disney takes the fifth spot with a 6.1% share. Interactive media & services is the top sector, accounting for 37% of the portfolio, while movies & entertainment, integrated telecommunication services, and cable & satellite round off the next three.
Vanguard Communication Services ETF has AUM of $2.9 billion and trades in a good volume of 305,000 shares a day, on average. It charges 10 bps in annual fees and has a Zacks ETF Rank #3 with a Medium risk outlook.
Communication Services Select Sector SPDR Fund (XLC)
Communication Services Select Sector SPDR Fund offers exposure to companies from telecommunication services, media, entertainment and interactive media & services, and has accumulated $9.7 billion in its asset base. It follows the Communication Services Select Sector Index and holds 25 stocks in its basket, with Disney occupying the fifth position at 4.9%. About 43.4% of the portfolio is allocated to interactive media & services, while entertainment and media round off the next two.
Communication Services Select Sector SPDR Fund charges 10 bps in annual fees and trades in an average daily volume of 5.6 million shares. It has a Zacks ETF Rank #3.
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The Walt Disney Company (DIS) : Free Stock Analysis Report
Invesco Dynamic Media ETF (PBS): ETF Research Reports
Invesco NASDAQ Internet ETF (PNQI): ETF Research Reports
Vanguard Communication Services ETF (VOX): ETF Research Reports
Fidelity MSCI Communication Services Index ETF (FCOM): ETF Research Reports
Communication Services Select Sector SPDR ETF (XLC): ETF Research Reports
