Walt Disney Co. (NYSE: DIS) Earnings Beat


Walt Disney (NYSE: DIS)

Walt Disney Beats Earnings on Higher Revenue

Before the bell on Tuesday May 5, Walt Disney reported second quarter financial earnings of $1.23 a share vs. 1.11 as expected. Disney beat on revenues of $12.45 billion beating the estimates of $11.65 billion in revenue. As seen Disney, typically reports earnings after the markets close, but moved its report announcement to Tuesday morning. This was done to allow their executives to attend the funeral of Survey Monkey CEO David Goldberg.

Theme Parks

While the ticket prices may be steep, the rise of the entry price into the park of over $100 has led to greater profits for Disney. Sales have risen to over 13 percent leading Disney to invest in greater attractions to bring in more guests in. The profit for the Orlando Florida Park has brought in $566 million this quarter. Worldwide parks profits rose 6 percent to $3.75 billion, increasing largely on the increase room rate, park entry price and merchandise spending.

Box Office Blockbusters

Walt Disney’s has had a few movie releases recently such has the super hero series “Big Hero 6” and the newest movie “The Avengers: Age of Ultron”. Disney is expecting to see close to the same open as the last Avengers, with opening ticket sales of $191.2 million. “Big Hero 6” could not stay on track to benefit as much as 2013, “Frozen”, Revenue for the studio division dropped 6 percent to $1.69 billion. For the consumer products division total revenue rose 10 percent thanks to “Frozen” toys and merchandise, adding 8 percent to total Disney revenues.

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Media Network Miss

Walt Disney’s largest division of their company is the media side, which decreased earning with the effect coming from higher costs of operations. The media divisions consist of Disney Channel, ABC and ESPN. Sales for these channels had risen 13 percent to $5.81 billion but were hurt by the decrease in operating income of 2.2 percent. Disney blames the decrease in income due to the high cost of running ESPN, which pays out billions a year for the rights to broadcast the live major sports events.

Analyst Comments

According to CNBC, RBC Capital Markets Analyst David Bank had the following comments:

“Don’t think of these movies as sort of classic superhero movies. These movies appeal to a broad … audience. These are not just ‘fanboy’ superheroes.” And, “The next thing we’re going to watch for is over time what is the plan for ESPN. Is there a lighter bundle coming and is ESPN in it?”

Pre Market shares are up $2.80 to $111.03 (2.52%). This is pushing Disney to new highs with a 52 week trading range of $78.54 – $111.66.

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