What to Expect From Disney Earnings

Media

Published: November 6, 2014 9:45 am

Last Updated: November 6, 2014 9:46 am

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Walt Disney Co. (NYSE: DIS) will report its fourth-quarter earnings Thursday after the U.S. markets close. Thomson Reuters has consensus estimates of $0.88 in earnings per share and $12.37 billion in revenue. In the fourth quarter of the previous year, the entertainment giant posted $0.77 in earnings per share and revenue of $11.57 billion.

The consensus estimates for the 2014 fiscal year are $4.31 in earnings per share and $48.76 billion in revenue, versus the previous year’s $3.39 in earnings per share and $45.04 billion in revenue.

The National Basketball Association (NBA) announced in early October that it will not only continue its partnerships with Turner Broadcasting System of Time Warner Inc. (NYSE: TWX) and Disney, but will also ramp up its content availability. The agreement states that Disney and Turner will broadcast NBA games through ABC, TNT and ESPN starting in the 2016-17 season and spanning nine years out to the 2024-25 basketball season. It also includes details on digital content distribution.

Apart from ESPN, Disney also boasts the movie and rights to Frozen, the highest grossing animated film of all time, which has a near-cult following. This Halloween, Disney sold over 3 million Frozen costumes. It might not be far off to expect that the huge success of Frozen would be reflected in Disney’s earnings for this quarter, and even more the full year.

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FBR Capital Markets recently had an Outperform rating for Disney and boosted its price target to $105 from $97. And Guggenheim downgraded Disney to a Neutral rating from Buy and lowered the price target to $87 from $96.

Disney tested its 50-day moving average in late September, before falling under it during the market sell-off. After Disney fell under that average, it tested the 200-day moving average, which acted as strong support and shares eventually crossed over the 50-day moving average.

Shares of Disney closed Wednesday up 0.7% at $91.00. The consensus analyst price target is $94.00, and the 52-week trading range is $66.72 to $91.98. Disney has a market cap near $155 billion.

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