Disney (DIS -0.12%) has a remarkably stable business thanks to its diverse entertainment empire. In fact, even as parts of the business, such as ESPN, have struggled at times, the media titan notched record sales and profit results in seven of the last eight years.

Yet Disney is entering more volatile territory in 2019. The company faces a high bar to pass given last year's massive outperformance at the theaters, for example, while major strategic initiatives like the push into subscription streaming and the integration of its 21st Century Fox acquisition threaten to pinch short-term profits.

A father and daughter eating popcorn at the movies

Image source: Getty Images.

Investors will get more details about each of these challenges when the company kicks off its fiscal 2019 with earnings results set to publish on Feb. 5. Here's a look at what to expect from the media giant. 

The bad news

Most investors who follow the stock are predicting modestly lower results on both the top and bottom lines. A big reason for that decline is the fact that Disney did so well in the box office in the year-ago period. Hit releases included Star Wars: The Last Jedi, Thor: Ragnarock, and Coco. This year's schedule was much lighter and led by Mary Poppins Returns and Ralph Breaks the Internet. CEO Bob Iger and his team said back in November that the relative weakness in the release calendar could mean far lower sales in the theatrical division and as much as $600 million less in profit.

Check out the latest Disney earnings call transcript.

Comparisons should get a bit easier as Disney progresses through the year and releases more of its heavy-hitters from the Marvel, Disney Animation, and Pixar studios. It has a high bar to meet overall, though, after having dominated the global box office in each of the last two calendar years.

The two smaller trends expected to pinch results this quarter are a spike in programing costs at ESPN, which is driven by the timing of content investments, and continued spending to support the ESPN Plus streaming app.

The good news

On the positive side of the ledger, look for Disney to show continued strength at the parks and resorts business, which has been flexing its pricing power muscles lately. That segment expanded revenue by double-digits last year with help from record attendance; the new Shanghai park; and rising prices, spending, and occupancy rates. All of these factors should contribute to another record year for Disney's in-person entertainment offerings.

Meanwhile, investors have good reasons to be optimistic about the cable broadcasting segment, which has posted improving subscriber trends in each of the last five quarters. Sure, Disney is still watching its pool of pay TV fans shrink, but the pace of the decline fell to below 2% last quarter, from 5% a few quarters earlier. Another improvement, or even stable results, would confirm that there's plenty of life left in the company's cash-producing TV broadcasting business.

Looking ahead

The big wildcards for investors this year include the closing of the 21st Century Fox deal, which will be sure to trigger spiking short-term expenses. Greater challenges lie ahead in the integration of the business and any potentially large writedown charges that might occur once management has a better idea of how productive these assets actually are.

Finally, shareholders should hear about how well Disney's new streaming service is progressing as it prepares to go head to head with Netflix (NFLX 1.73%) starting late in the year. On one hand, Netflix's price hike will give Disney more room to price its new service competitively. On the other hand, Netflix just passed 148 million members and may add another 30 million to its rolls in 2019. That means Disney will face a well-entrenched competitor in a few months, so it must execute well across areas like content, streaming quality, marketing, and pricing. As the saying goes, you only get one chance to make a first impression.