Disney is set to release its fiscal second-quarter earnings report on Tuesday, marking the company's first report since overcoming a high-profile proxy fight with activist investor Nelson Peltz. The media giant, under the leadership of CEO Bob Iger, recently implemented a reorganization strategy, dividing the company into three core business segments: Disney Entertainment, Experiences, and Sports.

The past year has presented Disney with various challenges, including a decline in its linear TV business, slower growth in its parks sector, and profitability hurdles in streaming. Nevertheless, CEO Bob Iger's turnaround plan has instilled renewed confidence among investors. Wall Street analysts, according to Bloomberg data, expect the company to outperform its Q2 2023 results, projecting total revenue of $22.10 billion compared to $21.82 billion last year, and adjusted earnings per share of $1.10 compared to $0.93 previously.

In terms of revenue, the estimates suggest that Disney Entertainment will contribute $10.31 billion to the company's overall earnings, while the Experiences segment is expected to generate $8.18 billion. The highly anticipated Disney+ streaming service is forecasted to reach 4.71 million subscribers, a significant improvement compared to a loss of 4 million subscribers in the same period last year.

Disney's stock has experienced a remarkable surge since the beginning of the year, displaying a remarkable 30% increase compared to the 10% rise of the S&P 500. This positive sentiment within the market can be attributed to improved financial performance and a series of recent announcements made by the company. Ahead of the proxy fight victory, Disney revealed plans for a dividend increase, a new share repurchase program, and confirmed its progress toward achieving its $7.5 billion annualized savings target by the end of fiscal 2024. Notably, the company also announced a $1.5 billion investment in Epic Games and unveiled a joint venture partnership with Fox and Warner Bros. Discovery, bolstering its presence in sports streaming.

Analysts hold a mixed view on Disney's upcoming earnings report. Tim Nollen, a Macquarie analyst, believes that sentiment has improved, although he highlights ESPN OTT as the biggest question for the company's financial outlook. On the other hand, Doug Creutz, the managing director at TD Cowen, expects the report to bring fewer groundbreaking announcements compared to the previous quarter.

Disney anticipates a surge in subscriber additions as Charter cable subscribers will soon receive complimentary Disney+ subscriptions as part of their packages. The company sets its own target of adding 5.5 million to 6 million core Disney+ users in Q2, while Wall Street remains more conservative, with a consensus estimate falling just short of 5 million subscribers. Recent price hikes and efforts to combat password sharing are expected to drive growth in average revenue per user (ARPU) in the second half of the year.

Disney's streaming business is projected to become profitable by the fourth quarter, signaling an exciting milestone in the company's ongoing transformation. As investors eagerly await the upcoming earnings report, the outcome will reveal whether Disney's strategic restructuring and recent initiatives have indeed laid a solid foundation for sustained growth and success in the digital era.