LOS ANGELES - Walt Disney Co CEO Bob Iger is expected to discuss a turnaround plan on Wednesday, when the media company delivers its first quarterly results since the return of the executive who built the modern incarnation of Disney.
According to employee and company observers, investors believe Iger will articulate a new vision for the company he built and ran for 15 years as anxiety sweeps across the ranks and file at the entertainment conglomerate.
Bob Iger is presenting for the first time in public. Bank of America analyst Jessica Reif Ehrlich said everyone is listening. Disney and Iger have been under pressure from activist investor Nelson Peltz, chief executive of Trian Fund Management, who has launched a proxy battle to place him on the board. He accused the company of underperforming financially despite its global scale and collection of powerful entertainment brands.
The board has a right combination of experience, skills and perspective to guide Disney through an unprecedented period of change, and the company urges shareholders to reject Peltz's bid, as stated in a Feb. 2 letter. It also endorsed Iger's leadership, adding that Disney generated a shareholder return of 554% under his previous tenure as CEO.
Iger announced plans to restore decision-making power to the company's creative executives after returning as CEO in November. The departure of Kareem Daniel, the head of the Disney Media and Entertainment Distribution group, created by Iger's predecessor, Bob Chapek, resulted in the departure of budgeting and distribution for the studio's content.
Even senior executives say they do not know what is going to come in Disney's notoriously tight-lipped culture. The restructuring is taking place at the highest level of the company, involving General Entertainment Chief Dana Walden, Film Chairman Alan Bergman, ESPN's Jimmy Pitaro and Chief Financial Officer Christine McCarthy.
Wall Street is waiting for Iger's assessment of Disney's streaming business, which he launched with the 2017 announcement that the company would form its own direct-to- consumer service. In fiscal 2024, Disney expects to reach profitability through its direct-to consumer service.
Wall Street is attracted to Disney's long-time cash cow, ESPN. Media analyst Michael Nathanson, a SVB MoffettNathanson analyst, said I'm not expecting numbers to be changed, but I'm expecting thoughtful conversations that are honest about these businesses.
Wall Street analysts expect first-quarter earnings of 78 cents a share, down from $1.06 a year ago, on revenue of $23.37 billion, up from $21.8 billion a year ago.