Walt Disney (NYSE: DIS)
After the market closed Tuesday, Disney announced earnings of $1.45 per share on $13.1 billion in profits up 13% from$1.28 a share on $12.5 billion for the same period last year. Unfortunately for Disney, analyst surveyed by Thomson Reuters were forecasting earnings of $1.42 per share on revenue of $13.22 billion. This slight miss in revenues sent share prices tumbling in post market trading. Robert A. Iger, Chairman and Chief Executive Officer, stated:
“We’re very pleased with our performance in the third quarter, with record net income and diluted earnings per share of $1.45, up 13% from the prior year. The strong results across our many diverse lines of business demonstrate the power of our unparalleled brands, franchises and creative content.”
Disney attributed much of their earnings growth on the strong performance of Avengers: Age of Ultron and the continued sales on the popular film Frozen. The company is expecting to get a similar boost, both at the box office and on store shelves, with “Star Wars: The Force Awakens,” which will be released Dec. 18. Star Wars could be a major win for Disney if marketed and executed correctly. It has one of the largest followings of any franchise out there and can surely increase Disney’s earnings with the new merchandise lines, theme park attractions, and movies. (MarketWatch)
DIS has been an excellent investment for 2015 and before their earnings on Tuesday they were up 28% for the year, spending most of that time above the 50 and 200d moving averages. With the slight revenue miss they took a hard dip in post market trading hitting a low of $110.41 right before the market opened on Wednesday, a 9% drop from previous day’s close. Average volume for the year has been in the 7 to 10 million share range but surged today to over 50 million shares traded. The 200d SMA is still sitting quite a bit lower in the $103 range so there is some more downside potential in that aspect, however, keep in mind that DIS hasn’t traded below it since October 15th of last year. There also looks to be support in the $109 and $107.65 price levels.
Looking at the DIS chart you can see that they have been in a strong up trend for the past few years and in my opinion are due for a little bit of a breather. Disney is still a very strong company and this pullback could create some excellent buying opportunities.
About Walt Disney
The Walt Disney Company, together with its subsidiaries, operates as an entertainment company worldwide. The company operates in five segments: Media Networks, Parks and Resorts, Studio Entertainment, Consumer Products, and Interactive. The Media Networks segment operates broadcast and cable television networks, domestic television stations, and radio networks and stations; and is involved in the television production and television distribution operations. Its cable networks include ESPN, Disney Channels, and ABC Family, as well as UTV/Bindass and Hungama. This segment owns eight domestic television stations. The Parks and Resorts segment owns and operates the Walt Disney World Resort in Florida that includes theme parks; hotels; vacation club properties; a retail, dining, and entertainment complex; a sports complex; conference centers; campgrounds; golf courses; water parks; and other recreational facilities. This segment also operates Disneyland Resort in California; Disney Resort& Spa in Hawaii; Disney Vacation Club, Disney Cruise Line, and Adventures by Disney; and Disneyland Paris, Hong Kong Disneyland Resort, and Shanghai Disney Resort, as well as licenses the operations of Tokyo Disneyland Resort in Japan. The Studio Entertainment segment produces and acquires live-action and animated motion pictures, direct-to-video content, musical recordings, and live stage plays. The Consumer Products segment licenses trade names, characters, and visual and literary properties to retailers, show promoters, and publishers; publishes entertainment and educational books, magazines, comic books; and operates English language learning centers. This segment is involved in the retail, online, and wholesale distribution of products through the Disney Store and DisneyStore.com. The Interactive segment creates and delivers entertainment and lifestyle content across interactive media platforms. The company was founded in 1923 and is based in Burbank, California. Yahoo Finance