Disney Earnings Appear to Not Be Enough for Investors

The Walt Disney Company (NYSE: DIS) reported fiscal first quarter financial results after the markets closed on Tuesday. The company had $1.63 in earnings per share (EPS) on $15.24 billion in revenue compared to consensus estimates from Thomson Reuters that call for $1.45 in EPS on $14.75 billion in revenue. The same period from the previous year had $1.27 in EPS on $13.39 billion in revenue.

During this quarter the company recorded $956 million in free cash flow, an increase of 12% from last year. On the books the company had $4.3 billion in cash and cash equivalents at the end of the fiscal first quarter.

In terms of its segments Disney reported:

• Media Networks revenues for the quarter increased 8% to $6.3 billion, reflecting higher advertising and affiliate revenues, and segment operating income decreased 6% to $1.4 billion.
• Parks and Resorts revenues for the quarter increased 9% to $4.3 billion and segment operating income increased 22% to $981 million. Operating income growth for the quarter was due to an increase at domestic operations, partially offset by a decrease at international operations.
• Studio Entertainment revenues for the quarter increased 46% to $2.7 billion and segment operating income increased 86% to $1.0 billion. Higher operating income was due to an increase in theatrical distribution results.
• Consumer Products & Interactive Media revenues for the quarter increased 8% to $1.9 billion and segment operating income increased 23% to $860 million. Higher operating income was due to growth at our Merchandise Licensing business.

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Bob Iger, Chairman and CEO of Disney, commented on earnings:

Driven by the phenomenal success of Star Wars, we delivered the highest quarterly earnings in the history of our Company, marking our 10th consecutive quarter of double-digit EPS growth. We’re very pleased with our results, which continue to validate our strategic focus and investments in brands and franchises to drive long-term growth across the entire Company.

Shares of Disney closed Tuesday at $92.32 with a consensus analyst price target of $113.34 and a 52-week trading range of $89.04 to $122.08. Following the release of the earnings report, the stock was initially down 3.7% at $88.78.