The D'Amaro Era: How the New CEO's First Earnings Call Set a Different Tone

This morning, Josh D’Amaro held his first earnings conference call since becoming CEO. In addition, Disney’s new Investor Relations lead Benjamin Swinburne moderated his first call since coming over from Morgan Stanley. With these two new leaders, there were some noticable and notable changes. 

The first change comes in the earnings release itself. It took a more holistic approach in discussing earnings. While the segment results are still listed, they are not the focus. In addition, the earnings release has transitioned to a shareholder letter that describes the results, while outlining the vision of the company’s future. 

In the letter, D'Amaro and Disney’s CFO Hugh Johnston outlined their priorities for the company as it moves forward:

1. Investing in the kind of intellectual property and creativity that not only breaks through the noise but also builds lasting connections and endures over time.
2. Expanding their global reach by connecting with more consumers through seamless and engaging experiences across the world.
3. Leveraging cutting-edge technologies to enhance their storytelling capabilities while driving increased monetization and better returns for the company.

In other words, nothing new. These are all hallmarks of D'Amaro's statements to this point. That is perhaps why it is surprising how the investment community seems to be just starting to understand how Disney views their business.

This quarter, instead of calling on investors to ask their questions, Swinburne read submitted questions. You would think this would allow them to filter the questions to allow them to paint the investors in the best possible light. However, the famously bad questions continued. While there are several insightful analysts, the ones who haven’t been paying attention unfortunately overshadow them.

D'Amaro and Johnston handled the need to repeat themselves deftly, even if they lied when saying, "That’s a great question," when it wasn’t. But the answers often made it seem as if we were conducting the earnings call. They discussed breaking down silos, the importance of ESPN in a streaming world, and the need to invest in new franchises while also focusing on popular ones. While I would like to think that the CEO and CFO are regular Laughing Place readers, I can’t imagine that is the case. Instead, we are on the same page because it makes sense. Most of the poor decisions made across corporate America come from trying to win over investment analysts. D'Amaro seems to start his tenure by effectively communicating his strategy to those who impact Disney’s stock price. 

In the investor letter, the word “fan” is used ten times. They know the value of various types of fans across their business and are focused on fostering their connection with their devoted audience. However, more of the same, is not a growth strategy. While they did not make major announcements about expansion today, perhaps that is a good sign. Maybe D'Amaro realizes that those reveals should come from fan-focused moments instead of an early morning conference call with a bunch of banks. He did say more is to be revealed about Disney's visions for growth initiatives, and I look forward to hearing them.