Media

Are Disney Earnings Enough for Investors?

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Walt Disney Co. (NYSE: DIS) reported its fiscal fourth-quarter financial results after the markets closed on Thursday. The company had $1.20 in earnings per share (EPS) on $13.51 billion in revenue, compared to consensus estimates from Thomson Reuters that call for $1.14 in EPS on $13.55 billion in revenue. The same period from the previous year had $0.89 in EPS on $12.39 billion in revenue.

Despite a strong performance across most of the segments, the lack of gains after the report might suggest that investors may have wanted even more when you consider how Disney shares moved after the prior quarterly numbers in August.

Cash provided by operations for fiscal 2015 increased 12% or $1.1 billion to $10.9 billion compared to fiscal 2014. On the books, Disney’s cash and cash equivalents totaled $4.27 billion at the end of the 2015 fiscal year compared to $3.42 billion in the previous year.

In terms of its segments, compared to the same quarter of the previous year, Disney reported:

  • Media Networks increased its revenues by 12% to $5.8 billion, with a 27% increase in operating income to $1.8 billion.
  • Parks and Resorts increased its revenues by 10% to $4.4 billion, with a 7% increase in operating income to $736 million.
  • Studio Entertainment revenues remained flat at $1.8 billion, with a $276 million increase in operating income to $530 million.
  • Consumer Products increased its revenues by 11% to $1.2 billion, with a 10% increase in operating income to $415 million.
  • Interactive revenues decreased by 15$ million to $347 million, operating income increased $13 million to $31 million.

Operating income growth at Media Networks was driven by higher affiliate fees, increased advertising revenue at ESPN and the ABC Television Network and higher operating income from program sales. These increases were partially offset by an increase in programming and production costs at ESPN and, to a lesser extent, the Disney Channels and the ABC Television Network.

Bob Iger, Chairman and CEO of Disney, said:

We had a strong quarter, with adjusted EPS up 35%, completing our fifth consecutive year of record performance. In Fiscal 2015 we delivered the highest revenue, net income and adjusted EPS in the Company’s history, reflecting the power of our great brands and franchises, the quality of our creative content, and our relentless innovation to maximize value from emerging technologies.

In an interview with CNBC, Bob Iger also said that no guidance would be given for the year and nothing to be said specifically about ESPN.

Shares of Disney closed Thursday down 0.2% at $113.00, with a consensus analyst price target of $118.00 and a 52-week trading range of $88.65 to $122.08. Following the release of the earnings report, shares were initially down 0.3% at $12.68 in the after-hours trading session.

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