This Week’s Earnings: Coinbase, Disney

Earnings season is continuing this week, with more firms informing investors of their results for the latest fiscal quarter of 2022. With traders seemingly hesitant as the debate over recession in the U.S. trudges on, this week’s quarterly results from Coinbase and Disney could have an influence on where major Indices head over the near term.

Digital Tokens Lose Their Sheen

Coinbase (COIN), the United States’ largest Cryptocurrency exchange platform, has been navigating through stormy waters so far this year. The so-called ‘Crypto winter’, characterised by drops in many key Cryptocurrencies, began taking a toll on the firm’s stock price earlier this year, and Coinbase shares are down more than 65% in 2022 to date. Furthermore, the Securities and Exchange Commission recently launched a probe to investigate whether some of the platform’s offerings have been incorrectly listed.

Coinbase’s second-quarter results, released to the public yesterday, do not seem to have gone too far toward helping matters. The firm’s core data far undershot previous estimates, leading to an over 10.5% decline in share value by the ring of the closing bell on Tuesday.

Perhaps due to broad-based drops in the values of many digital coins, Coinbase reported a net loss of over $1 billion for the second quarter of the year. This marked a drastic decline since Q2 2021 when net income reached nearly $1.6 billion. Losses per share hit $4.98, higher than the $2.65 previously expected. Coinbase’s total Q2 revenue was more than $20 million lower than analyst predictions at $808 million. 

It may seem clear that the general jitters stemming from market volatility have turned traders away from Crypto. According to Coinbase executives themselves, the loss of over 200,000 monthly users observed over the quarter can be attributed to traders exiting the sphere as a whole rather than choosing to utilise a rival platform.  (Source:CNBC)

The continuing downturn in Crypto has already made its mark on Coinbase’s business practices as well as its bottom line; the firm has laid off nearly one-fifth of its personnel this year. Whether this key exchange platform can return to the heights seen during the COVID pandemic era rests, in large part, on factors beyond the control of those occupying the Coinbase executive suite.

Will Disney’s Dreams Come True?

One of the global entertainment industry’s most recognised names is set to release Q3 results after markets close today. Analyst predictions for Disney’s (DIS) rapidly-approaching earnings release seem to be broadly positive.

While inflation and the accompanying interest rate hikes may have exerted some pressure on Disney, subscriber numbers for the firm’s proprietary streaming platform Disney+ as well as increasing visitorship at its theme parks could provide some encouragement this afternoon. 

Consensus estimates are for Disney+ to have added 10 million new subscriptions to the platform, despite the loss of rights to broadcast the Indian Premier League’s cricket matches. Nevertheless, Disney+’s subscription rolls could grow by a quarter billion by the end of next year. In addition, revenue from consumer products and theme parks could have hit nearly $1.8 billion. (Source:Yahoo Finance)

Revenue for Disney’s fiscal third quarter is estimated to have reached $21 billion, pushing earnings per share to $0.96. Whether these figures will be enough to push traders to help Disney reverse part of its 30% stock value slide so far this year is as yet uncertain. 

This year has been full of surprises for investors so far this year, and although this week’s earnings releases may have provided important insights to market watchers, more could very well still be in store.