Friday, February 4, 2011

Walt Disney Co. (NYSE: DIS): Q1 Earnings Preview

Walt Disney Co. (NYSE: DIS) is scheduled to release its fiscal first-quarter financial results after the closing bell on Tuesday, February 8, 2011. Analysts, on average, expect the company to report earnings of 56 cents per share on revenue of $10.52 billion. In the year ago quarter, the company reported earnings of 47 cents per share on revenue of $9.74 billion.

The Walt Disney Company (NYSE: DIS) is a leading media and entertainment conglomerate. The company is divided into five major business segments: Media Networks (including the ABC network), Parks and Resorts, Studio Entertainment (including Pixar), Consumer Products and Interactive Media. 

In the preceding fourth quarter, the Burbank, California-based company's net income was $835 million, or 43 cents a share, compared to $895 million, or 47 cents a share, in the year-earlier quarter. On an adjusted basis, the company earned 45 cents per share in the latest quarter. Revenue fell slightly to $9.74 billion from $9.87 billion in the same quarter last year. Analysts, on average, had expected the company to report earnings of 46 cents per share on revenue of $9.94 billion.

At its last earnings call in November, the company forecast rising ad sales, pricing and theme park attendance"The current trends in our business are encouraging. We're also optimistic about our creative pipeline. Thus, we believe we are well positioned to deliver strong results in 2011," said Disney Chief Financial Officer Jay Rasulo on a conference call with analysts. Disney said ad sales in the first quarter were pacing up double-digit percentages at both ESPN and TV stations, reflecting a stabilizing economy. It also said U.S. hotel reservations were up 5 percent in the first quarter from a year-ago.

Disney has had success with some of its recent films in 2010. Its Toy Story 3 surpassed $1 billion in global box office revenues this year, becoming the second movie after Alice in Wonderland to reach the $1 billion mark in 2010. Disney's Pirates of the Caribbean 4 is also on the horizon, with the company already planning fifth and sixth sequels. Given the past success of the Pirates of the Caribbean series, the possibility of a continued run of successful film releases could lift Disney's box office market share and stock value.

The company has renewed its emphasis on its core strategy of creating and distributing attractive content for children and syndicating this content through its various entertainment channels. 

The media giant recently announced a deal with Netflix  to stream re-runs of episodes from its ABC network and cable channels like Disney Channel and ABC Family. The deal opens up another way to monetize older content for Disney.

During the quarter in review, the company raised its current annual dividend by 14.3% to 40 cents a share from 35 cents a share.

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